Thursday, July 25, 2024

James Carthew: Power up your portfolio with US infrastructure trusts

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While all eyes have been on the meteoric rise of Nvidia, whose 121% gain over the first five months of 2024 is the third best of all S&P 500 stocks, you may not have noticed that its index peer Vistra, a power company based in Texas, soared 157%.

Vistra is one of the largest power companies in the US, with 41 gigawatts of generation capacity serving about 5m customers. While it still has some coal plants and a presence in natural gas-fired generation, increasingly its focus is on low carbon alternatives including nuclear and solar.

Vistra is a top-10 holding for Ecofin Global Utilities and Infrastructure (EGL), as is the fourth-best-performing S&P 500 stock, Constellation Energy, which is up 86% year to date. Positions such as these have helped the trust achieve a double-digit net asset value gain over the past six months but manager Jean-Hugues de Lamaze thinks that there is plenty more to go for.

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