October 31, 2025
Commentary
Monthly Update
Year-to-date to October 31, the Ninepoint Global Infrastructure Fund generated a total return of 5.46% compared to the MSCI World Core Infrastructure Index, which generated a total return of 10.73%. For the month, the Fund generated a total return of -0.40% while the Index generated a total return of -0.88%.
Ninepoint Global Infrastructure Fund - Compounded Returns¹ As of October 31, 2025 (Series F NPP356) | Inception Date: September 1, 2011
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
Inception |
|
|---|---|---|---|---|---|---|---|---|---|
Fund |
-0.40% |
5.46% |
0.53% |
3.33% |
6.66% |
11.58% |
10.29% |
8.70% |
8.26% |
MSCI World Core Infrastructure NR (CAD) |
-0.88% |
10.73% |
1.96% |
4.18% |
10.24% |
10.41% |
9.11% |
8.21% |
10.86% |
It was another good month for the broad equity markets but underneath the surface, there was quite a dispersion in terms of performance. According to data from S&P Global, the Information Technology sector (+6.59%) led the S&P 500 as earnings from the mega-cap tech stocks crushed expectations, for the most part. Interestingly, the quarterly report from Meta Platforms was not well received, as investors questioned the company’s accelerating capex spending given the still questionable returns on investment. The Health Care sector (+3.58%) finished the month in second place on the leaderboard, perhaps a bit surprising after a long period of relative underperformance. The laggards included the Materials sector (-4.47% on the gold price correction) and the Consumer Staples sector (-2.68%). Again, the outperformance of the mega caps can clearly be seen by examining the S&P 500 and the Equal Weight S&P 500, with returns of 2.27% and -0.93% respectively (according to LSEG).
To date, with 91% of the S&P 500 companies having reported actual results, 77% have reported a positive revenue surprise and 82% have reported a positive EPS surprise, according to FactSet. For Q3 2025, the blended (actual and expected) year-over-year earnings growth rate is 13.1%, well above the 8.0% that was expected as we entered the reporting season. Management commentaries have been broadly positive, as most companies have been able to mitigate the impact of the tariffs on profit margins. Although it would not be surprising for volatility to pick up slightly now that we have seen the results of mega cap tech, it still feels like the rally can continue through the balance of the year.
The month wrapped up with a FOMC meeting that concluded on October 29th with another 25-basis points interest rate cut, after a 25-basis points cut on September 17th, to a target range of 3.75% to 4.00% for the overnight rate. However, during the ensuing press conference, Chairman Powell’s tone seemed more hawkish than the market probably wanted to hear after he emphasized that a December rate cut was “not a foregone conclusion”. Prior to his comments, the interest rate forward curve was implying near certainty, which quickly shifted to a 67% chance of a 25 basis points cut in December. We still think we get one more cut in 2025 and based on history, interest rate cuts are supportive of continued market gains, at least in the near term.
Unfortunately, the US government remains shut, which has affected thousands of government employees, has prevented the release of timely economic data and has now led to the cancellation of flights across the United States due to safety concerns. Despite this overhang, the US equity markets remain largely unconcerned (with the S&P 500 index level valuation at 22.7x forward earnings compared to the 5-average of 20.0x and the 10-year average of 18.6x, according to FactSet) but clearly it is time to come to a resolution before the US economy comes under serious pressure. To mitigate the risks, we have reduced outsized allocations to individual stocks and investment themes while remaining invested in a broadly diversified portfolio, in case a growth scare or some other shock materializes over the next couple of months.
Top contributors to the year-to-date performance of the Ninepoint Global Infrastructure Fund by sector included Utilities (+724 basis points) and Industrials (+190 basis points), while the Real Estate (-165 basis points), Energy (-87 basis points) and Communication Services (-12 basis points) sectors detracted from performance on an absolute basis.
On a relative basis, negative contributions from the Utilities (-164 basis points), Real Estate (-146 basis points) and Industrials (-58 basis points) sectors detracted from performance.
We are currently overweight the Industrials sector and underweight the Energy, Real Estate and Utilities sectors. As the broad market indices grind higher, we continue to grapple with valuation concerns offset by solid earnings growth and the chance of supportive rate cuts through the balance of the year.
We believe that an easier monetary policy should broaden participation in the rally through year-end and into 2026, which would be healthy in terms of the longevity of the bull market. In the meantime, we remain focused on high-quality, dividend-paying infrastructure equities that have demonstrated the ability to consistently generate revenue, cash flow and earnings growth through the business cycle.
We continue to believe that the infrastructure asset class is ideally positioned to benefit from the electrification of the global economy and increased fiscal spending on infrastructure in Canada, the US and Europe. Importantly, electricity demand is expected to accelerate dramatically, led primarily by the construction of AI-focused data centers globally and the onshoring of industrial manufacturing in the US. Therefore, we are comfortable having exposure to various infrastructure sub-sectors or sub-industries in the Ninepoint Global Infrastructure Fund that are positioned to benefit from these themes, including traditional energy investments, electrical, natural gas, nuclear & multi-utilities and engineering & construction contractors.
The Ninepoint Global Infrastructure Fund was concentrated in 30 positions as at October 31, 2025, with the top 10 holdings accounting for approximately 37.5% of the fund. Over the prior fiscal year, 24 out of our 30 holdings have announced a dividend increase, with an average hike of 6.5% (median hike of 5.8%). Using a total infrastructure approach, we will continue to apply a disciplined investment process, balancing valuation, growth, and yield in an effort to generate solid risk-adjusted returns.
Jeffrey Sayer, CFA
Ninepoint Partners