A look at alternatives to traditional income – generating
assets in a low interest rate world
The fall in UK base rates to unprecedented levels has resulted
in negative yields on cash, after allowing for inflation, and
negligible or negative yields on most bonds too. Many investors
have therefore found themselves forced into higher-risk assets such
as equities.
The attractions of infrastructure funds
Because of their extra risks, mainstream equities are not always
suitable investments, hence the desire to find more stable sources
of investment income. Infrastructure funds are one option. While
bearing some of the risks that bonds and equities do, they
generally offer long-term income streams, often with some form of
linkage to the rate of inflation. The funds that are listed on the
stock exchange typically have predictable, long-term cash flows
from a range of government-backed infrastructure projects, to which
their dividends are linked. The bigger listed
