Strong corporate earnings helped by frenzied AI-related capex investment drove global stock markets higher in H1 2026, enabling indices to overcome the geopolitical uncertainty and oil price volatility created by the on–off Iran war.
In stoking already above-target inflation in the US and reawakening price pressures in Europe, the conflict in the Middle East has upended the interest rate outlook. Earlier market expectations of US rate cuts have faded in the face of more hawkish commentary by the Federal Reserve. In Europe, the European Central Bank raised rates in June, its first hike since 2023, with a further increase expected in September.
For the Lazard Global Listed Infrastructure team, unpredictable geopolitics aside, we believe this macro backdrop is unsurprising. We have cautioned for some time that inflation would remain above central bank targets and that interest rates would stay higher for longer.
The global listed infrastructure asset class behaved much as we would expect in this environment. Over the last 12 months, in a heavily momentum-driven market, listed infrastructure lagged the broader MSCI World Index in relative terms while still delivering solid absolute returns.
Defensive by Design
The Lazard Global Listed Infrastructure strategy has historically proven resilient through recessions and market downturns. It has exhibited an equity beta of around 0.7, downside capture of 0.56, and lower volatility since its launch in 2005.
We believe this conservative risk profile stems from our focus on “preferred infrastructure.” These are monopolistic businesses with inflation-protected, regulated, or contracted revenue streams, which produce the consistent, forecastable earnings and cash flows that investors often gravitate towards when markets stumble.
Upside/Downside Capture
As of 30 June 2026. All data in AUD.
1 Since Inception: November 2005.
Upside/downside capture ratio: A benchmark-relative ratio between a composite and its benchmark that seeks to explain portfolio construction in up and down markets. The return-based characteristics are based on the gross-of-fees composite returns. Please refer to “GIPS® Composite Information” for additional information, including net-of-fee results. The performance quoted represents past performance. Past performance does not guarantee future results. The index is unmanaged and has no fees. One cannot invest directly in an index. For definitions, please refer to appendix.
Benchmark: MSCI World.
Source: Lazard, MSCI, FactSet.
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