Manulife Asset Management (Hong Kong), a subsidiary of Canada's Manulife Financial, has launched an  emerging markets infrastructure fund on its mutual-fund platform, to tap investment in basic support foundations for developing economies.

The kind of companies that the fund will invest in will be associated with construction and development of core infrastructure assets, such as water supply, power generation, toll roads, schools, hospitals, telecommunications, cargo and ports.

In order to maintain a relatively lower risk portfolio, the fund will generally not invest in infrastructure development companies with a significant exposure to energy or basic-materials providers such as steel and oil companies as these cyclical businesses lack the predictable earnings outlook that makes infrastructure sector attractive.

The manager of the fund is Australia's Macquarie Investment Management and the fund is distributed by Manulife investment funds intermediaries, partner banks, brokers and independent financial advisors.

“The infrastructure sector of emerging markets equities generally provided a higher return with lower volatility in the last decade compared with emerging-market indices and other asset classes. The fund gives investors a diversified mix of infrastructure assets in emerging markets that should generate a steady growth,” said Raymond Kong, assistant vice president and product manager, investment funds at Manulife Asset Management (Hong Kong). 

“Emerging markets such as China, Brazil, India and Russia have established themselves as key driving forces in the world economy in the last few years,” he said.

“Rapid urbanization and a burgeoning population in these high-growth countries mean they will require new investments to address their increasing infrastructure needs. Furthermore, with nationwide growth-development projects and upcoming international sports events in some of these countries, demand for improved infrastructure will continue to be strong and this presents good investment opportunities in the sector."