How to invest in infrastructure through an SMSF

In the past, governments built these assets for the community, but they are also now frequently owned and developed by private entities or through public-private partnerships (PPPs). PPPs typically involve a government granting a private entity the contractual rights to operate an asset for a set period.

These are all assets that are built to last – sometimes for upwards of 50 years – and typically yield a very stable income stream. It is therefore well suited to superannuation with its long-term investment horizons.

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Transparency

For SMSF investors it’s also easy to see where the income comes from.

Take toll roads as an example. The government used to charge tolls to cover the construction of a road, but that model is changing. 

With private companies building major roads in PPPs, tolls may be charged above the original cost of the asset – providing an ongoing income to the investor (with governments sometimes offering cashbacks to the motorists).

Access

Infrastructure assets are also expensive to build and purchase and, unlike a residential property, not something even a large SMSF would be able to own outright. So, if you have an SMSF, how can you invest in infrastructure?

Managed funds

There are a number of managed funds available to SMSFs and other investors to gain exposure to infrastructure.

Traditionally, managed funds have not been a favourite investment tool for SMSFs but for some asset classes, such as infrastructure, they are one of the few readily available options. They also offer a level of diversification an SMSF trustee could not achieve on their own.

Below are the top ten infrastructure funds as rated by Morningstar Australia over the past three years.

• Covers open-end funds domiciled in Australia
• Total returns based on oldest share class of each fund
• Total returns are reported as of 3 January 2025

© 2025 Morningstar Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied distributed or combined with other 3rd party data without prior written consent; and (3) is not warranted to be accurate complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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Listed funds

There are also listed investment companies (LICs), exchange-traded funds (ETFs) and listed managed funds on the ASX in the infrastructure space, units of which can be bought and sold on the ASX like shares. The table below shows the type of investment structure, the index it tracks and the management expense ratio (MER).

Industry funds

One industry fund has also opened up its internal infrastructure investment options to SMSF investors. It is the only fund currently doing this, but it does give SMSFs a new way to access infrastructure investments directly.

Hostplus has launched Self Managed Invest (SMI), which allows investors to invest alongside the $115 billion fund. The Hostplus Infrastructure SMI Option offers access to a global portfolio of managers and assets. Total investment fees and costs of the option are 1.01% per year.

What to watch for

Infrastructure is an asset class worth considering for portfolio diversification and regular income but it requires commitment and you may not be able to get your funds out easily.

Because infrastructure assets are often illiquid (that is, difficult to sell quickly) you should get financial advice about how much of your portfolio to invest in this asset class. It may be more suitable as a satellite allocation for a small portion of your investment portfolio, to fill a gap in your core portfolio.

As demand for alternative investments such as infrastructure increases and prices rise, it is important to be mindful of investment costs as well.

The bottom line

As a long-term asset with stable income, infrastructure is definitely worth considering for your SMSF or personal investment portfolio if you haven’t done so already. For SMSF trustees, don’t forget to update your investment strategy for this asset class if it’s a new addition, and amend your trust deed to allow for infrastructure investments if you need to.

Important: This article is general information only and is not a recommendation for you to invest in the asset class or any of the investments listed. SuperGuide recommends you seek independent personal financial advice when considering financial investments that are appropriate for you.

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