By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
- John Maynard Keynes
Inflation is back on investors’ minds—and with bonds struggling to provide their traditional ballast, many are rethinking how to build a more resilient portfolio.
Global infrastructure, which offers stable, contracted income streams, inflation sensitivity, and low correlation to equities, may be an attractive alternative for investors. Infrastructure investments include physical assets that economies depend on to function, such as:
Infrastructure exhibits attractive durable characteristics for investors: long asset lives, high barriers to entry, regulated or contracted revenue streams, and pricing power that tends to hold up well against inflation. The investment case is further supported by several structural tailwinds:
Massive and growing demand - A recent 2026 PwC report estimates the world will need to invest $151.1 trillion in infrastructure between 2025 and 2050, including a 121% increase in power spending and a 66% jump in transportation. This structural tailwind underpins long-term return potential.1
Inflation protection and resilient cash flows - Infrastructure's regulated and contracted inflationary trackers have historically led to strong annualized performance during higher inflation periods, while resilient cash flows have provided both upside capture in growth environments and relative strength when market conditions are challenged.
Record investor appetite – According to a McKinsey report2, Global infrastructure fundraising reached a record of nearly $200 billion in 2025, surpassing the previous high of $180 billion in 2022, with limited partners naming infrastructure as the asset class they most want to increase allocations to—citing diversification, return improvements, and asset class performance as primary motivations.
Potential portfolio de-risking - Infrastructure offers the potential to de-risk portfolios that may be overweight expensive or transactional AI beneficiaries, since growth in infrastructure from generative AI is regulated and contracted, making it potentially more resilient if the pace of development slows.
Broad diversification across sectors and geographies - Infrastructure remains one of the most attractive asset classes, driven by its stability, long-term capital growth, and diversification—with long-term contracts and regulated return frameworks providing predictable, inflation-protected cash flows that are especially valuable amid geopolitical uncertainty and volatility.
Global Infrastructure in a Portfolio Context
To illustrate potential portfolio enhancements, we created sample portfolios with varying allocations to infrastructure, as highlighted in the 10 year characteristics table below.
We used the S&P Global Infrastructure Index, which provides broad global exposure and tracks ~75 listed infrastructure companies which align with three major infrastructure sectors: energy (~20%), transportation (~40%), and utilities (~40%).
| 10 Year Characteristics | |||||
| Return (annualized) |
Standard Deviation | Sharpe Ratio | Max Drawdown | Inflation Beta3 | |
| S&P 500 Index | 15.26% | 15.30% | 0.85% | -23.87% | -1.25 |
| Bloomberg US Agg Bond Index | 1.67% | 5.08% | -0.12% | -17.18% | -1.43 |
| S&P Global Infrastructure Index | 8.48% | 15.32% | 0.46% | -30.41% | 0.63 |
| 60-40 Portfolio | 9.94% | 10.14% | 0.75% | -20.16% | -1.28 |
| 55-35-10 Portfolio | 9.97% | 10.44% | 0.74% | -19.31% | -1.08 |
| 50-30-20 Portfolio | 10.00% | 10.83% | 0.72% | -18.45% | -0.89 |
| 50-20-30 Portfolio | 10.69% | 11.91% | 0.72% | -18.64% | -0.69 |
| 50-10-40 Portfolio | 11.37% | 13.06% | 0.71% | -21.84% | -0.49 |
Past performance is no guarantee of future results. One may not invest directly in an index.
Sources: Morningstar and Federal Reserve Bank of St. Louis via FRED, as of 04/30/2026
Sample portfolios rebalanced annually to target allocations.
60-40 Portfolio: 60% stocks, 40% bonds. 55-35-10 Portfolio: 55% stocks, 35% bonds, 10% global infrastructure.
50-30-20 Portfolio: 50% stocks, 30% bonds, 20% global infrastructure. 50-20-30 Portfolio: 50% stocks, 20% bonds, 30% global infrastructure. 50-10-40 Portfolio: 50% stocks, 10% bonds, 40% global infrastructure.
Adding even modest allocations to global infrastructure can meaningfully improve important portfolio characteristics. The 55-35-10 Portfolio illustrates a low-commitment entry point: with just a 10% infrastructure sleeve, inflation beta improves by 18% relative to the standard 60-40, while returns are essentially maintained. For investors willing to go further, the 50-30-20 Portfolio maintains returns while reducing max drawdown, and inflation beta improves by 44%: a meaningful shift toward inflation resilience for a moderate increase in overall volatility.
The 50-20-30 Portfolio materially improves returns by 75 basis points (bps) per year while also reducing drawdowns, and inflation beta improves by 86%, positioning the portfolio to benefit meaningfully from rising inflation.
The 50-10-40 Portfolio delivers the highest return and best inflation beta in our sample. However, there are potentially diminishing returns at this concentration level, as the max drawdown now exceeds the 60-40 Portfolio, reflecting the higher volatility of infrastructure relative to bonds.
Conclusion
Global infrastructure offers a compelling complement to traditional portfolio construction. Its combination of stable income, inflation sensitivity, and low correlation to equities addresses many of the traditional 60/40 portfolio gaps.
With structural investment tailwinds and a growing global need for infrastructure investment, an allocation to global infrastructure is a potential enhancement for many investor portfolios.
Important Disclosures & Definitions
1 PwC. (2026, April 28). Global Infrastructure Outlook 2025–50: Accelerating human progress.
2 Green, A., Nangia, I., & Sandri, N. (2025, September). The infrastructure moment: Investing in the expanding foundations of modern society. McKinsey & Company.
3 Inflation Beta – measures the sensitivity of an investment to changes in the inflation rate. For example: a 1% positive increase in inflation would increase the investment return by 1%.
Basis Point (bps): a unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument.
Bloomberg US Aggregate Bond Index: a broad-based benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, fixed-rate agency MBS, ABS and CMBS (agency and non-agency).
10-Year Breakeven Inflation Rate: represents a measure of expected inflation derived from 10-Year Treasury Constant Maturity Securities and 10-Year Treasury Inflation-Indexed Constant Maturity Securities. The latest value implies what market participants expect inflation to be in the next 10 years, on average.
S&P 500 Index: widely regarded as the best single gauge of large-cap US equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.
S&P Global Infrastructure Index: designed to track 75 companies from around the world chosen to represent the listed infrastructure industry. To create diversified exposure, the index includes three distinct infrastructure clusters: energy, transportation and utilities.
One may not invest directly in an index.
Tailwind: a certain situation or condition that may lead to higher profits, revenue or growth.
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