Infrastructure tops equities on Iran war fears and tech selloff

Binaya Dahal

Journalist

23 April 2026

Inflation fears stemming from the Iran war and a sharp rotation out of technology stocks has lifted listed infrastructure above global equities in both March and the first quarter of 2026, according to Shane Hurst, portfolio manager at ClearBridge Investments.

Hurst said natural gas utilities and pipeline companies led returns in the global listed infrastructure space, benefiting from both elevated energy prices and their defensive characteristics.

“Infrastructure assets offer inherent inflation protection, particularly during periods of geopolitical disruption and commodity shocks,” he said. “This characteristic has become increasingly valuable as markets grapple with persistent inflationary pressures and higher interest rates.”

The outperformance extended to renewables and utilities across North America and Europe, where rising capital expenditure requirements to meet surging electricity demand and modernise ageing networks underpinned solid gains.

The fund’s economically sensitive holdings such as toll roads, airports and rail operators also delivered positive returns over the quarter, though performance turned more mixed in March as inflation concerns weighed on consumer demand expectations.

Hurst added that US electric utility Entergy was the quarter’s most notable outperformer, supported by progress on its generation expansion and a major data centre agreement. In Europe, U.K. based SSE contributed positively as concerns around funding and the domestic economic outlook eased.

However, not all positions fared well as U.S. based Constellation Energy slipped due to delays in a data centre agreement, and the French airport operator Aéroports de Paris (ADP) saw decline following an unfavourable tariff ruling.

“While the near-term regulatory outcome for Groupe ADP was disappointing, we believe ongoing engagement with stakeholders supports a more balanced long-term resolution,” Hurst said.

During the quarter, ClearBridge said it added exposure to transport and energy infrastructure through new positions in Getlink, Grupo Aeroportuario del Sureste and Pembina Pipeline, while exiting several utility and rail holdings.

“We are still in the early stages of an accelerated infrastructure investment cycle, driven by expanding mobility needs, rising energy demand, a shifting energy mix and the modernisation of networks to enhance resilience against physical asset risk and environmental risk,” Hurst said.

“We continue to expect low double digit internal rates of return over the next five years, underpinned by defensive dividend profiles and growth outlooks.”