Investing superannuation in infrastructure
Investing your superannuation directly in infrastructure such as ports, airports and water plants is now available through a public offer fund - Cbus's new infrastructure option for self-managed members. Cbus is also offering a new direct investment option in office, retail and industrial property.
Cbus is a $31 billion fund set up for the building and construction industry but is open to the public. It has over 99,000 members.
The Cbus Self-Managed Infrastructure option consists of a portfolio of listed and unlisted Australian and international infrastructure (40%) managed by specialists such as IFM Investors, Hastings Funds Management (unlisted infrastructure) and RARE Infrastructure (global listed infrastructure). Assets are large, long-term investments that provide services for many years and include seaports such as Port Botany and Port Kembla, airports including Melbourne, water recycling in the UK, toll roads and railways.
Cbus Self-Managed Property has a portfolio of key commercial property holdings overseen by experienced managers including AMP, ISPT, Cbus Property (unlisted property) and Resolution Capital (listed global property). The minimum initial investment is $3000 but you can't invest more than 25% of your total account balance in either option (or 50% together). The income distributions are not paid out but are reinvested.
The platform fee for the direct investment option is $240 a year plus 0.08% of assets.
Money Verdict: At a time when sharemarkets are going down or sideways and returns from fixed income, term deposits and cash are low, property and infrastructure could be a smart diversifying asset class. But it is hard for an investor to know about the quality of properties and tenants, level of debt and the length of leases, as the funds' online fact sheets do not provide extensive information. Performance is also hard to assess, as the funds commenced only last year. But for the six months to January 6, 2016, infrastructure returned 1.8% and property 5.4%. The investments aim to deliver inflation plus 3.75%pa