Following the strong performance in July, the performance initially continued in August. However, the hawkish comments of FED chair Powell sent indices lower at the end of august. As a result, the MSCI World Index gave back 3% last month. The FTSE Global Core Infrastructure 50/50 index showed its more defensive nature again and was down only 0.4%. The performance was impacted by strong performance in Emerging Markets and flattish performance for US Utilities. The YTD performance of 12% for listed infrastructure (vs. -7% for the MSCI World Index) highlights the characteristics of the asset class - offering inflation protection and defensiveness.

The Fund was up more than 0.5% (net, I share class), ahead of the benchmark. The relative performance was mainly driven by our stock selection in Asia, Latam and US Pipelines.

On a stock level, the biggest positive contribution in June came from:
1) Rumo (+17%) which continued its strong performance of last month as it reported a good set of H1 results, while an optimistic outlook for 2022/23 grains crop was released by agencies;
2) Cheniere (+9%) as it reported a large 2Q22 EBITDA beat and increased its 2022 guidance significantly; and
3) West Japan Railway (+9%) was supported by decent Q1 results. The company saw passengers recovering quicker than expected (now back to 87% in July as % of pre-covid, whilst competitors that we do not own such as East JR are at 78%), and the company also explained costs had not gone up as fast as passengers had recovered.

The biggest negative contributions came from:
1) Cellnex (-11%) traded lower as it is correlated to rates despite decent H1 earnings;
2) Malaysia Airport (-5%) which did not report significant company news; and
3) CSX (-6%) which we added to the fund (and was funded by selling Union Pacific) for which we see value by resolving labor shortage among others.

The Kempen infrastructure investment strategy strikes a balance between qualitative, quantitative, sustainability analysis. Our experience and know-how in the area of infrastructure and legislation in combination with extensive data analysis, is converted into fact-based investment decision-making. Our unique valuation analysis and investment process focuses on the long term, carefully following megatrends such as digitization, urbanization and the energy transition. Next to the quantitative approach the investment strategy contains three equally weighted qualitative parameters that determine the warranted valuation: management added value, Infrastructure regulation / quality and ESG. The portfolio managers score each company covered on these three parameters. Companies that excel in ESG for example will be assigned a higher score and hence the warranted valuation for an investment increases.

Portfolio construction of the Strategy is based on cluster neutrality. This ensures a diversified portfolio and neutralizes currency and macro-economic exposure versus the benchmark.