Infrastructure has remained resilient in 2026’s volatile markets, up over 10% in just the first two months of the year.1 Sarah Murray, BlackRock’s Head of Product Strategy for Global Real Assets, unpacks the trends driving growth in this historically conservative asset class – and why it’s becoming an essential element in the modern portfolio.
Key takeaways
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After delivering strong returns in 2025, global listed infrastructure has returned more than 10% in the first two months of the year2, with growth driven by AI-fuelled electricity demand and the focus on energy security as geopolitical tensions rise
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A number of structural mega forces are also driving infrastructure’s rise in the long term, including urbanisation in emerging markets and the transition of energy to lower carbon sources
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From a portfolio standpoint, infrastructure’s defensive characteristics, strong income profile and attractive valuations make it an essential diversifier in today’s investing landscape
From defensive allocation to structural growth story
Infrastructure has emerged as an early standout sector this year, delivering strong performance while broader global equities have been essentially flat. We believe this resilience reflects the combination of a generational inflection in demand, fundamental momentum, and greater investor appreciation for the asset class, rather than a short-term rotation.
Historically, infrastructure was viewed as a defensive and income-focused allocation, primarily accessed by institutional investors via private funds. That perception is changing.
Wealth investors are increasingly focused on how to access the sector, recognising that listed infrastructure offers exposure to companies providing some of the most essential services — from electricity grids and water networks to rail, roads, pipelines and data centres.
Transitioning from a defensive to growth asset class
Listed infrastructure vs MSCI World earnings, 2015-2027
Source: BlackRock Investment Institute, with data from Bloomberg, November 2025. Notes:Orange and yellow bars show EPS compound annual growth rates (CAGRs) for selected periods for the FTSE Developed Core Infra 50/50 Index and MSCI World, respectively. Green and purple dashed lines show the average CAGR between 2015 and 2024.
The market began to appreciate the sector’s fundamentals in 2025. Listed infrastructure delivered approximately 14% over the year3, with active strategies outperforming through taking advantage of opportunities in specific sub-sectors and regions.
That momentum has carried into 2026, with the sector up 10.6% by end February4, compared with 2.4% for global equities. Several forces are reinforcing that strength.
The top trends driving infrastructure’s rise
The AI buildout
This is driving a step-change in electricity demand, benefiting utilities which represent around half of the global listed infrastructure benchmark. Utilities and pipeline companies have emerged as key partners to the hyperscalers as they build out their energy intensive AI data centres.
Rising geopolitical tensions
Energy security is back in focus, supporting midstream gas pipelines that are crucial to natural gas transport and export.
The essential nature of infrastructure
While many parts of the equity market are currently grappling with disruption risk and shortened product cycles, infrastructure assets tend to be long-lived, capital intensive and difficult to replace. As a result, infrastructure is among the least exposed sectors to AI disruption in the entire market, which has supported the sector YTD.
Estimated global data centre capacity, 2025-2030
Source: BlackRock Investment Institute, November 2025.
The long-term forces listed infrastructure will benefit from
The low-carbon transition
Electricity use has been rising roughly twice as fast as total energy consumption, according to 2025 International Energy Agency data, driven by electrification of transport, heating and industry. The shift toward lower carbon and more electrified mixes is inherently capital intensive, as sources like renewables and nuclear require more upfront investment than traditional energy systems.
Building this transition infrastructure while maintaining and upgrading legacy systems such as power grids makes this one of the most infrastructure-heavy transformations in modern history.
Digitalisation
The explosion of data creation, AI training and cloud services is driving exponential growth in computing capacity. Our base-case projections show global data centre load nearly doubling by 2030 from 2025 levels.5
This extends beyond data centres to fibre networks and 5G towers, which are now critical enablers of productivity and economic resilience.
Geopolitical fragmentation
This trend is prompting fossil fuel-importing nations – home to roughly 70% of the world’s population6 –to invest in infrastructure that cuts dependence on other markets and boosts flexibility of the energy mix, from renewables to LNG terminals. Governments are seeking more secure, home-grown energy supplies — including renewables and, in many cases, nuclear power.
Energy security in focus
Share of world population living in net importers of fuel
Source: BlackRock Investment Institute with data from International Energy Agency, World Energy Balance, as of April 2025. Note: Share of population living in net importer countries by fuel types (%).
From a portfolio perspective, listed infrastructure can also play a distinctive role, particularly when accessed through listed markets.
Why infrastructure should be in portfolios today
Its defensive characteristics
Infrastructure provides exposure to physical assets with multi decade lifespans that are essential to economic activity – making them less susceptible to disruption or to the business cycle. Historically, that has translated into equity-like returns but with meaningfully lower volatility.7
Income opportunities
Cash flows from infrastructure assets are typically regulated or contracted, often with inflation linkage, meaning investors can often benefit from a higher yield profile than broad global equities.8
Attractive valuations
Listed infrastructure valuations are currently trading at a 20% discount to broader equities, yet most investors only typically hold around 4-5% exposure to the asset class through broad indices9. With strong fundamental long-term tailwinds intact, taking a decisive view on infrastructure exposure rather than leaving it incidental is becoming increasingly important for investors.
Listed infrastructure vs MSCI World valuations, 2010-2025
Source: BlackRock Investment Institute/MSCI/FTSE data, November 2025. Chart shows the ratio of enterprise value to earnings before interest, tax, depreciation and amortisation for listed infrastructure and global equities. The lines show the average relative valuation and the ±2 standard deviation from that average. Index proxies: FTSE World Core Infrastructure 50/50 and MSCI World.
What could shape performance for the rest of 2026
Power availability
After two decades of flat electricity demand, global demand is now growing again, driven by AI – with some data centre hubs experiencing high double-digit growth. This shift is already feeding through to earnings upgrades, supported further by the need to modernise ageing grid infrastructure, particularly in Europe.
A significant amount of the electricity generated to power AI data centres is also coming from new natural gas power plants. The buildout of these natural gas plants across the US is driving an increased need to build natural gas pipelines.
Modernisation will be critical for EU and US power grids
Average regional grid age
Source: Nexans, 19 January 2026
Policy and politics
Rising electricity demand and data centre investment bring questions around affordability and regulation, especially ahead of US midterm elections in the second half of 2026. While this may create volatility — particularly for more commodity-exposed independent power producers — recent long-term contracting structures suggest risks are more contained than headlines may imply.
Increasing defence budgets
Satellite assets, in particular, are benefiting from increased defence spending and strategic prioritisation, with improving fundamentals across parts of Europe and Japan. Communications infrastructure remains an area of interest.
Taken together, these dynamics suggest 2026 could be a pivotal year for infrastructure, as earnings growth, valuation support and structural demand converge.
