‘This is the best fund to own when markets fall’

Charles Hamieh, who runs the ClearBridge Global Infrastructure Income fund, tells Lauren Almeida why his portfolio can prosper in a crisis

As the shock waves from war in Europe send global stock markets tumbling, DIY investors have scrambled to add more defensive assets, such as gold, cash and bonds, to their portfolios.

But there are still some bright spots left among shares, according to Charles Hamieh, who runs the £1bn ClearBridge Global Infrastructure Income fund. His portfolio has stayed in the black this year, while its average rival has lost 1pc. The fund invests in listed companies that run or build vital infrastructure assets around the world. They include businesses involved in toll roads and the supply of electricity and water.

Mr Hamieh tells Telegraph Money how infrastructure stocks provide portfolios with diversification and pay generous dividends. The fund has returned 71pc since its launch in 2016 and yields 4pc.

WHO IS THE FUND FOR? Investors who want income while growing their savings. We aim to generate reliable income and returns that beat inflation over five years.

It gives investors access to the wonderful characteristics of infrastructure: inflation protection, reliable cash flows, dividends and protection when stock markets fall.

Our income sources are diversified across the world with investments in 10 countries across nine different sectors, such as electricity, water and gas.

HOW DO YOU PICK STOCKS? We buy companies that provide essential services, such as Britain’s National Grid: businesses that have long-term contracts with very stable cash flows and attractive dividends. They must be defensive, but also do well in rising markets and take advantage of increased spending by governments.

We create our own universe of potential stocks to buy, looking at infrastructure that is essential to a functioning society. The companies we look at tend not to be too researched by analysts or owned by rivals. We’re trying to find overlooked gems.

We then look at the potential return from each stock versus what it could lose us if we’re wrong. This is because we have to be confident the fund as a whole doesn’t lose as much as the market when prices go south. Our aim is to preserve capital.

Finally, we look at the environmental, social and governance record of each company. This helps us identify risks and, more importantly, any opportunity for the company to thrive.

WHY DOES THE FUND INVEST IN RENEWABLE ENERGY? There’s nothing more important to reducing our reliance on fossil fuels than renewable energy. Targets to reduce emissions are changing the way we use energy and will mean governments spend a lot more on infrastructure. That is in the sweet spot of what we do.

We are quite unique as investors focused on listed infrastructure companies. There is a good opportunity to own high- quality companies, such as Clearway Energy. It’s growing its asset base because of the momentum behind moving towards renewable energy.

HAS THE CRISIS IN UKRAINE AFFECTED YOUR INVESTMENTS? We don’t invest in Russia and none of our companies has direct exposure to Ukraine. That being said, as oil prices rise, some of the companies we own in the supply chain could benefit. This is because there may be renewed drilling in regions such as the US. This would stimulate their sales but it would be very marginal for our fund. There is no direct impact from what’s sadly unfolding in Ukraine.

IS INFRASTRUCTURE REALLY NOT CONNECTED TO THE REST OF THE STOCK MARKET? It is not uncorrelated, as they are listed stocks, so there is still share price movement, volatility and risk of losses.

WHAT HAVE BEEN YOUR BEST AND WORST INVESTMENTS? Our best is Clearway Energy, which we bought at $15 in late 2019 and it now trades at more than $ 30, so it’s been a fantastic performer and we have taken some profits along the way.

Our worst investment was Águas Andinas, a Chilean water company.

We bought it in 2019 but then regulation became more complicated and the government proposed reducing the company’s returns. The market began to look too uncertain to us and we sold at a loss of around 30pc.

WHAT WOULD YOU BE IF NOT A FUND MANAGER? A pilot. When I was a kid I used to force my dad to drive out to Sydney airport to watch planes landing and taking off.