In April the Property & Infrastructure Fund was down -4.4%, underperforming the benchmark which was down -1.6%.

Our new Mexican airport investments Grupo Aeroportuario del Sureste (+8.1%) and Grupo Aeroportuario del Centro Norte (+11.6%) reported first quarter earnings which beat expectations. The better-than-expected results were encouraging given Mexico is experiencing airline capacity issues (associated with unplanned maintenance of GTF engines) more acutely than many other regions. This is due to the prevalence of Ultra Low Cost carriers which are most affected by unplanned maintenance. Both airport groups benefitted from favourable passenger mix, with carriers re-directing scarce capacity onto international routes, which are higher value for both airlines and airports. International passengers attract higher aeronautical charges and tend to spend more at airports commercial operations, e.g. duty free. We increased our position in Aeroportuario del Centro Norte during the month as its relative valuation became more attractive.

Canadian Pacific Kansas City (-11.0%) missed expectations (-1.6% at earnings per share level), with intermodal volume weakness somewhat offset by its favourable business mix. Management maintained its full-year guidance for double-digit earnings growth per share, with one caveat on strikes by railway workers in Canada. Guidance can be met if a brief strike occurs, however the uncertainty wasn’t welcomed by investors. We remain confident in the CPKC thesis and management’s ability to execute, and we increased our position during the month.