March 31, 2026
Commentary
Monthly Update
Year-to-date to March 31, the Ninepoint Global Infrastructure Fund generated a total return of 13.53% compared to the MSCI World Core Infrastructure Index, which generated a total return of 9.77%.
NINEPOINT GLOBAL INFRASTRUCTURE FUND - COMPOUNDED RETURNS¹ AS OF MARCH 31, 2026 (SERIES F NPP356) | INCEPTION DATE: SEPTEMBER 1, 2011
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
Inception |
|
|---|---|---|---|---|---|---|---|---|---|
Fund |
-1.16% |
13.53% |
13.53% |
9.61% |
11.75% |
14.88% |
11.27% |
10.46% |
8.73% |
MSCI World Core Infrastructure NR (CAD) |
-2.18% |
9.77% |
9.77% |
8.49% |
12.59% |
12.09% |
9.44% |
9.24% |
11.23% |
If investors thought that 2025 was wild, the first quarter of 2026 did not offer much relief. The year began optimistically, with solid global growth indicators, resilient labour data and bullish investor sentiment. Although there was some rotation to more cyclical sectors underneath the surface, the AI-trade was still mostly working and the details contained in President Trump’s OBBB implied that bigger tax refunds would bolster consumer spending, essentially the biggest engine of the US economy. Analysts were feeling confident, with consensus estimates calling for revenue growth of 7.3% and earnings growth of 14.9% for 2026 (according to FactSet), suggesting another year of double-digit returns at the index level. Finally, monetary policy looked to remain supportive in 2026, with at least two more interest rate cuts priced in by the end of the year.
Unfortunately, by late February/early March the mood darkened. The United States and Israel launched coordinated airstrikes against Iran, justified as pre-emptive, defensive operations to destroy Iranian nuclear and missile programs and eliminate senior leaders of the regime. But retaliation was swift and surprisingly robust, with neighbouring states surrounding the Persian Gulf and US bases in the area facing an onslaught of drones and missiles. Iran also made use of its most effective weapon by closing the Strait of Hormuz, a critical chokepoint for approximately 20% of the global oil trade. From an economic perspective, the effects were almost immediate, with Brent crude spiking close to $120 per barrel (from below $70 per barrel) and WTI crude topping $115 per barrel (from below $65 per barrel).
The spike in oil prices opened the stagflation playbook, with higher inflation expectations triggering the bond market to price in two rate hikes instead of two rate cuts in 2026 and the US dollar to appreciate, both of which reduced growth expectations and therefore lowered equity market valuations as volatility measures exploded higher. Admittedly, some sectors did well during the selloff, with energy and energy-related equities rallying along with defensives such as utilities. Interestingly, the NASDAQ entered a correction (declining more than 10% from its record high) as the Mag7 underperformed, but the S&P 500 didn’t quite get to correction territory (only falling approximately 9% from peak to trough).
Given the risk of an extended oil shock, we think the markets have been remarkably well-behaved, likely because investors have been conditioned to expect a policy flip-flop from the current US administration (think the “Liberation Day” tariff rate TACO). However, we are mindful that resolving the war in the Middle East and reopening the Strait of Hormuz requires other parties to agree to terms. After decades of managing money through various cycles and crises, we are generally optimistic over the long term, but the current environment is testing our patience. Therefore, we have reduced outsized allocations to individual stocks and investment themes while remaining invested in a broadly diversified portfolio following our disciplined investment process.
Top contributors to the year-to-date performance of the Ninepoint Global Infrastructure Fund included the Utilities (+551 basis points), Industrials (+386 basis points) and Energy (+370 basis points) sectors, while no sector detracted from performance on an absolute basis.
On a relative basis, positive return contributions from the Industrials (+254 basis points), Real Estate (+201 basis points) and Utilities (+19 basis points) sectors were offset by negative contributions from only the Energy (-16 basis points) sector.
We are currently overweight the Utilities and Industrials sectors and slightly underweight the Energy and Real Estate sectors. Over the first three months of the year, the macroeconomic outlook has shifted dramatically, which has impacted the price of oil, inflation expectations, interest rates and global growth expectations. In response, we have had to adjust our positioning as the market faces increased geopolitical and economic uncertainty. 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 well-positioned to benefit from the electrification of the global economy and increased fiscal spending on infrastructure in Canada, the US, and Europe. Importantly, we anticipate a renewed focus on the infrastructure necessary to ensure a secure supply of domestic energy. As a result, we are comfortable maintaining exposure across a range of infrastructure sub-sectors poised to benefit from these themes, including traditional energy assets (such as storage and pipelines), electrical utilities (with an emphasis on those using natural gas or nuclear feedstocks), and engineering & construction contractors.
The Ninepoint Global Infrastructure Fund was concentrated in 30 positions as at March 31, 2026, with the top 10 holdings accounting for approximately 37.9% of the fund. Over the prior fiscal year, 26 out of our 30 holdings have announced a dividend increase, with an average hike of 6.2% (median hike of 6.2%). 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