“It’s going to go a lot higher”. This was US President Donald Trump talking about the stock market after securing a $1 trillion investment deal from the Saudi government.
When he won the presidency I was asked by a lot of people if it was going to be good or bad for markets. I had no idea. One thing I was fairly sure of was to always back self interest. At his inauguration he was surrounded by billionaires.
Yes, those billionaires would have lost a heck of a lot on paper during the tariff turmoil but we’re now not far off those previous highs. The S&P 500 currently sits at 5,902. The previous high in February was 6,147.
- S&P 500 = +0.98%
- Nasdaq = +1.84%
- Aussie dollar up 1.6% to 64.74US cents
- Iron down 0.4% to $99.60 US a tonne
ETF on my radar
Yesterday I had the pleasure of talking with Mark Jones from Resolution Capital. Mark specialises in global listed infrastructure and is part of the team that runs the Resolution Capital Global Listed Infrastructure Active ETF (ASX:RIIF). It’s a mouthful of a name, let’s just agree to call it RIIF.
The ETF mirrors Resolution’s unlisted fund, it has been running since September 2021 and has returned just a shade over 10%pa since inception. Two things stuck out to me, firstly how they operate. There are three portfolio managers and each has a slice of the fund. They are given the autonomy to make their own calls, ensuring the portfolio represents the best ideas of each.
The second thing that stood out was the conviction in electricity utilities. They make up almost 50% of the portfolio. The energy transition was one aspect of the investment case but sheer consumption was the other. Resolution also has a global property portfolio and that holds a number of data centres and the two investment teams share information back and forth.
No one doubts the AI boom isn’t upon us. Selecting who the winners will be in five and ten years time is incredibly difficult to do. Predicting all the major and emerging players will chew up a lot of energy along the way…well that’s a bit more obvious.
Meta Platforms Inc (NASDAQ: META) announced in December it was opening an enormous data centre in Louisiana. Entergy Corp (NYSE: ETR) will be powering that data centre and is also RIIF’s third largest position.
I really enjoyed my chat with Mark, keep an eye out for it in about a week or so’s time.
If you want to get in touch with me please use the chat in the bottom right, jump across to Rask Invest or find me in the Community.
