December 31, 2025
Commentary
Monthly Update
Year-to-date to December 31, the Ninepoint Global Infrastructure Fund generated a total return of 2.22% compared to the MSCI World Core Infrastructure Index, which generated a total return of 10.41%. For the month, the Fund generated a total return of -4.15% while the Index generated a total return of -2.84%.
NINEPOINT GLOBAL INFRASTRUCTURE FUND - COMPOUNDED RETURNS¹ AS OF DECEMBER 31, 2025 (SERIES F NPP356) | INCEPTION DATE: SEPTEMBER 1, 2011
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
Inception |
|
|---|---|---|---|---|---|---|---|---|---|
Fund |
-4.15% |
2.22% |
-3.45% |
-1.65% |
2.22% |
9.99% |
8.63% |
8.97% |
7.92% |
MSCI World Core Infrastructure NR (CAD) |
-2.84% |
10.41% |
-1.17% |
2.59% |
10.41% |
8.83% |
8.13% |
8.17% |
10.71% |
It was a wild year for equity investors, with generally solid returns for the major indexes despite some serious volatility underneath the surface. In all honesty, the year was a difficult one for many active managers, with two significant whipsaws (triggered by the announcement of DeepSeek and “Liberation Day”) that proved tricky to navigate. Further, the traditional “Santa Claus rally” failed to materialize, although widely anticipated, which was disappointing. Despite the challenges, we are optimistic about 2026, and we firmly believe that our tried and tested investment process will generate returns that meet our high expectations over the long term.
Our optimism is premised on another good year for revenue and earnings growth. According to FactSet, the current quarterly earnings season is shaping up nicely. The number of companies that have issued positive guidance for Q4 2025 is above average, with revenue expected to grow 7.7% and earnings expected to grow 8.3% year over year. For fiscal 2026, consensus estimates are calling for revenue growth of 7.3% and earnings growth of 14.9%, suggesting another year of double-digit returns at the index level. Admittedly, valuation remains an issue, with the current forward 12-month P/E at 22.2x, well above the 5-year average of 20.0x and the 10-year average of 18.7x (again according to FactSet). But revenue and earnings growth of the largest stocks in the S&P 500 (primarily in the Communication Services and Information Technology sectors) remain significantly above the market average, which bodes well for continued strength into 2026. Whether the AI-trade can continue to power the market higher or a rotation to more cyclical, value-oriented sectors can happen will be the key debate in the coming months.
Finally, monetary policy should remain supportive in 2026, with at least two more interest rate cuts to come in 2026, possibly in June and October. But investors should be mindful that the appointment of a new Fed Chair could create some volatility heading into the mid-term elections, consistent with historical patterns. Therefore, we have reduced outsized allocations to individual stocks and investment themes while remaining invested in a broadly diversified portfolio following our tried, tested and disciplined investment process.
Top contributors to the year-to-date performance of the Ninepoint Global Infrastructure Fund by sector included Utilities (+529 basis points) and Industrials (+141 basis points), while the Real Estate (-238 basis points), Energy (-47 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 (-302 basis points), Real Estate (-183 basis points) and Industrials (-121 basis points) sectors detracted from performance.
We are currently overweight the Industrials and Energy sectors and underweight the Real Estate and Utilities sectors. With a fresh start to the year, we believe that an easier monetary policy should broaden participation in the equity market rally through 2026. To mitigate risk, 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 invested in 30 positions as at December 31, 2025, with the top 10 holdings accounting for approximately 38.7% of the fund. Over the prior fiscal year, 22 out of our 30 holdings have announced a dividend increase, with an average hike of 6.2% (median hike of 5.7%). 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