After a year in which defensive stocks suffered disproportionately from the higher-for-longer interest rate narrative, we believe listed infrastructure is attractively valued to start 2024. Valuations look cheap relative to equities, with the stocks trading near levels seen during the global financial crisis. This is despite the bounce we saw at the end of 2023, when a series of softer inflation prints and weaker economic data catalyzed a sharp pullback in bond yields. Listed infrastructure also looks attractively priced relative to unlisted infrastructure assets, with average trading multiples for listed infrastructure companies at an estimated 30 percent discount to the latest available private infrastructure transaction data.

The current valuation backdrop enhances our confidence that listed infrastructure will outperform during a three-year horizon.

Whether 2024 brings a soft landing or deeper recession, our base-case expectation is for decelerating growth alongsid