What's the buzz?

Infrastructure may be a buzz word in portfolio diversification, especially during current volatile conditions, but where is its place in a portfolio, how has it performed and is it really the defensive asset it is touted as?

Infrastructure is a portfolio diversifier and an effective tool to reduce risk and increase return over time. Listed infrastructure assets have a mid-range correlation with UK and global equities but do not behave in the same way, according to Neil Jones, division director at Macquarie. "One percent dedicated to infrastructure will not do much in terms of diversification and 15% is taking the idea too far, but there is an optimum middle ground, often 5%-8%," he said. Tom Durie, partner at Oriel Securities, said there is more recognition from private clients that they should allocate an ...