Investec Wealth and Investment has reported an increase in its clients’ overall exposure to infrastructure funds by over £40 million ($61.5 million) for the last 12 months and by £60 million over the past two years. 

The firm said that in the past nine months it had invested in new share issues which had performed comparably to the FTSE 100's 15 per cent total return for the 12 months up until 31 March 2013.

For the 12 months up until 31 March 2013, the GCP infrastructure fund gave at total return of 16 per cent, whilst the HICL infrastructure fund gave a return of 14 per cent. The John Laing and International Public Partnerships infrastructure funds both gave positive total returns of 13 per cent respectively.

“With government bond yields and base rates remaining at rock bottom, infrastructure is providing a welcome source of income for many investors and we expect the sector to continue to perform solidly over 2013.  However, investors are likely to be better off by investing in a secondary issue at close to net asset value rather than buying existing shares in the market at a premium,” said Chris Hills, chief investment officer at Investec Wealth and Investment.

Infrastructure funds are comprised of three distinct areas which include social assets, such as schools and hospitals; economic assets, such as train rolling stock and toll motorways; and utilities.

They are continuing to gain popularity because they offer investors a healthy dividend with a reliable, long-term income stream that is partly inflation-linked. They also have a relatively low correlation to equities in the pattern of their returns. The market value of listed infrastructure funds on the London Stock Exchange has risen from £1.4 billion to £4.9 billion since the end of 2008 as increasing numbers of funds have gained listings and existing funds have raised fresh capital.

In other recent developments, in March the firms's wealth and investment arm said it had reached the £40 billion mark in assets under management.