MARKET REVIEW
The S&P Global (SPGI) Infrastructure Index (the Index) advanced 10.1% in the second quarter. The Index performance was led higher by strong performance in the transportation and utility sectors. The midstream energy sector ended modestly higher for the period.
QUARTER
The PGIM Jennison Global Infrastructure Fund advanced but underperformed the Index for the quarter.
The Fund experienced gains across most of its sectors. Strong performance in both the utility sector (Elia Group SA/NV, E.ON SE, Vistra (VST), National Grid (NGG) PLC, Constellation Energy (CEG), SSE PLC) and the transportation sector (Ferrovial SE, Grupo Aeroportuario del Pacifico, Aena SME SA, Sacyr SA, Transurban Group) helped to drive positive performance. However, declines in a few utility stocks (PG&E (PCG), NextEra Energy (NEE), Dominion Resources, CMS Energy (CMS)) hurt performance for the quarter.
Relative to the S&P Global Infrastructure Index, the Fund was hurt by both an underweight and stock selection in the transportation sector. Exposure to the communications sector, which is not represented in the Index, also hurt performance for the quarter. Stock selection within the midstream energy and utility sectors helped to offset some of the underperformance as did an underweight to midstream energy versus the Index.
KEY CONTRIBUTORS
- Elia Group SA/NV
- E.ON SE
- Vistra Corp
Elia Group SA/NV develops and operates as a transmission system operator in Belgium and Germany. It provides electricity transmission solutions, generates electricity; imports and exports electricity; and offers engineering consultancy services. Among European utilities, Elia Group offers sector-leading regulated asset base (RAB) growth of approximately 20% CAGR through 2028 driven by robust investment in transmission connections for offshore wind farms as well as enhancing their onshore grids in Belgium and Germany.
In early March, Elia Group announced a long-awaited equity financing plan (including a 1.35 bn euro rights issue) to fund their significant investment plan, alleviating
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