Why invest in the infrastructure megatrend?
Infrastructure is what links us together. It brings us light, keeps us warm, helps us get to work and back home again quickly (usually), and enables trade to take place. Roads, railways, fibre optic networks, radio masts, airports, hospitals, water supply systems, and waste disposal facilities are just a few examples of what makes up the ubiquitous network that is infrastructure.
It is literally the foundations underpinning society and the economy, both of which rely on constant access to effective infrastructure systems. A fast Internet connection, flowing traffic, and a reliable energy supply are basic things that we take for granted in business and everyday life. And it means trouble whenever there is a longer-lasting disruption. Infrastructure is a true global megatrend – and it essentially always will be. It needs to be kept going, expanded, upgraded, and made fit for the future. What possibilities does this area offer in terms of financial investment? What opportunities are there, and what risks are likely to arise?
An infrastructure trend reversal
For a long time, economising has been the catchword when it comes to infrastructure in both the USA and Europe. In the last few years, however, the trend has started to reverse. Some ambitious projects and programmes have been approved all over the world:
Infrastructure is the focus of both the InvestEU Programme and the NextGenerationEU initiative – together, they are worth more than EUR 1.1 billion.
Germany has relaxed its debt brake for defence spending and infrastructure investment.
China still has a long way to go in terms of modernisation and development and is pouring enormous sums from the state coffers into infrastructure measures.
In the US, President Trump will not be able to implement his reindustrialisation plans without massive infrastructure improvements, even if he would prefer to completely repeal the corresponding law of his predecessor.
In the foreseeable future, large amounts of money will be made available here, from which numerous private companies active in this sector could also benefit.
Infrastructure is going green – and going digital
Infrastructure is often associated purely with “traditional” aspects such as roads, railway lines, or power lines – in other words, technical infrastructure. To keep up with our rapidly growing and evolving society, however, new dimensions like climate change, digitalisation, changes in mobility, and urbanisation are constantly being added to the mix. Fundamental changes are needed to make our infrastructure fit for our future life.
For example, power grids need to be modernised to ensure a successful energy transition. The conventional power infrastructure is designed for a central energy system based on fossil fuels. Electricity used to flow one way, from large power stations and through the grids to consumers. With a growing number of small photovoltaic systems and wind farms being integrated into the network, electricity is now flowing in all directions all the time. Renewable energy – like wind and solar power – is more volatile and less centralised, with consumers increasingly becoming producers too by installing solar panels on their roofs. To balance electricity supply and demand, power grids need to be smarter and more digitalised.
A complete rethink is called for when it comes to transporting and storing energy or managing electricity networks. Global data networks, self-driving vehicles, the Internet of Things, smart cities – all of this requires innovative solutions in terms of infrastructure. As well as being intelligent and digital, however, these modern solutions also have to be sustainable and climate-resilient. A great deal of new infrastructure is needed if the 17 United Nations Sustainable Development Goals are to be met. From clean water to sustainable communities, the Organisation for Economic Co-operation and Development (OECD) estimates that an annual investment volume of around seven billion US dollars is needed to make infrastructure environmentally friendly.
Invest in infrastructure equities: Raiffeisen-NewInfrastructure-ESG-Aktien
Infrastructure funds offer a simple and straightforward way for private investors to invest in this asset class.
Investing directly in infrastructure projects often involves very high minimum investments. Infrastructure funds turn an asset class that is otherwise not very accessible into an investable option for private investors too (Financial literacy: everything about funds). These are special equity funds that invest in a broad range of companies involved in building or managing infrastructure or supplying key infrastructural components.
Raiffeisen-NewInfrastructure-ESG-Aktien
This is precisely where Raiffeisen-NewInfrastructure-ESG-Aktien comes into play. This actively managed fund invests not only in equities from the industrials sector (e.g. construction or transport firms), but also has positions in information technology, materials sector companies, and telecommunications. Many of these companies boast a strong global market presence. A number of companies are also included in the fund Raiffeisen-MegaTrends-ESG-Aktien due to their attractiveness and positioning in key technological trends. This applies, for example, to topics such as technology, energy efficiency, and solar energy.
First place at CAPinside
CAPinside Austria has analysed the performance of more than 200 global infrastructure funds that have been on the market for at least five years. Raiffeisen-NewInfrastructure-ESG-Aktien came in first in the performance comparison. Source: CapInside, 04/2025
What should be considered with infrastructure equities?
Characteristics of infrastructure investments
The infrastructure sector is by nature highly diversified and has more facets to it than virtually any other. Water, transport, energy, and other segments such as education, health care, and telecommunications all fall under the infrastructure umbrella.
There is always a need for infrastructure. It is essentially concerned with basic services and is relatively unaffected by the development of short-term market cycles. Demand for water and power supply, for the construction and maintenance of transport routes, and for telecommunications services is relatively constant.
Many contracts between business enterprises are concluded on a long-term basis – over several years or even decades. They are also often linked to inflation (price adjustment clauses).
The infrastructure sector often sees high capital requirements and territorial limits. As a result, the barriers to new players entering an existing market in the first place are often very high. Certain areas of infrastructure are therefore dominated by a select group of companies.
Risks of infrastructure investments
In addition to general uncertainties relating to business operations (e.g. management errors, unforeseen additional costs), there are specific risks involved in the infrastructure sector.
Regulatory or legal framework conditions can fundamentally change business prospects.
Politics is another factor that can create uncertainty. For instance, the government in a particular region may simply do a U-turn and decide not to implement a planned infrastructure project after all, possibly due to opposition from the local community.
Forces of nature also pose a risk, as they can quickly inflict substantial damage to infrastructure in particular.
Basic equity risks (e.g. increased price volatility, unfavourable exchange rate fluctuations) can never be excluded. Anyone investing in funds such as Raiffeisen-Infrastruktur-Aktien should be aware of these risks and bear them in mind.
Investors in infrastructure should have an investment horizon spanning multiple years.
Growth and continuity in infrastructure investments
One advantage of the very diverse infrastructure sector is that it contains both explosive growth and strongly economically driven stocks, as well as quite a few rather ‘unattractive’ companies that are less dependent on economic cycles. The latter are often involved in the construction and operation of infrastructure (i.e. airports, motorways, ports, etc.)
This means that infrastructure equity funds often perform better than the broader equity market in economic downturns, but tend to underperform in strong economic upturns. In this respect, they are a good way of diversifying an equity or mixed portfolio.
Nevertheless, they are not immune to economic downturns and the associated risks to profit development and equity prices, or to general downward movements in the markets. Like all equities, they are subject to the risk of significant price fluctuations, including losses in value and capital.
Fund portrait on the topic of infrastructure
Infrastructure equities offer fascinating investment opportunities in a sector that encompasses many essential goods and services, is growing and constantly changing at the same time. In addition to its numerous opportunities, however, it also harbours risks - both for the companies involved and for investors.
The Raiffeisen-NewInfrastructure-ESG-Aktien and the Raiffeisen-MegaTrends-ESG-Aktien exhibit elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.
Fund Manager on infrastructure equities
 "Stefan Grünwald, Raiffeisen Capital Management")
Stefan Grünwald
Mr. Grünwald provides insights into the transformation of infrastructure and answers questions about whether infrastructure is a worthwhile investment theme for investors and which megatrends could be interesting for infrastructure.
State: April 2025