Water companies could be worth a second look

Infrastructure assets' performance is typically stable throughout economic cycles, given the essential nature of the services they provide.

However, the past three years have seen a perfect storm for UK water utilities, as the mix of a challenging regulatory review by Ofwat and the threat of nationalisation by the Labour Party resulted in the sector de-rating from one of the highest valued utility sectors globally, to trading at below its regulated asset value.  Despite the criticism the sector has received of late, the three listed UK water companies (out of a total of 17 privatised water companies) have delivered significant quality and service improvements in the current regulatory period. Three trust picks for ESG por...