Hello, I'm Nina Liu, portfolio specialist for Principal's listed real asset strategies, and welcome to our annual Global Listed Infrastructure Outlook. While the asset class undoubtedly faced some recent challenges, we continue to be encouraged by the resilience and the long-term potential of the asset class. Let's explore our top five reasons to consider Global Listed Infrastructure, or GLI, 2025.

First up, GLI valuations are looking particularly attractive, trading at historically cheap multiples relative to equities. History has shown that when infrastructure stocks trade at these levels, it's been a harbinger for long-term outperformance. With the possibility of more modest equity returns over the next decade after reaching such highs over the last few years, we find that the long-term prospects for GLI look more promising.

Second, we're expecting some reversion and market moves that could benefit infrastructure after a tough fourth quarter last year. The immediate market response to the U.S. election clearly favored pro-growth sectors, leaving more defensive infrastructure behind. However, as 2025 progresses, the reality of the new administration's policies could prove more complex than initially reflected, which could help infrastructure come back into focus.

The strength of the underlying economy and labor market, as well as the specific policies enacted and their timing, will matter a lot for growth and inflation outcomes in 2025. And while the new administration is likely to repeal some provisions of the Inflation Reduction Act, we believe that tax credits supporting wind and solar will remain in place, as these policies benefit from broad bipartisan support, which should benefit infrastructure stocks exposed to renewables.

Third, while the market typically thinks of infrastructure stocks as rate-sensitive, the reality over the last five years has shown a pretty inconsistent relationship, proving rate changes are unlikely to be the only variable that matters to investors this year. Since we don't have a crystal ball to precisely predict rate paths and the market responses, instead, we remain focused on what fundamentals are likely to drive returns.

For instance, demand for data centers and additional power needs may boost earnings growth potential for some U.S. utilities and natural gas infrastructure operators in 2025. In rate-sensitive sectors, like cell phone towers, catalysts such as accelerated leasing activity could create upside potential. We also anticipate growing attention to opportunities outside the U.S.

Fourth, GLI is still an attractive option for institutions looking to round out their private equity infrastructure exposure. GLI offers a risk profile similar to private core infrastructure, and is currently screening at more attractive valuations relative to private counterparts. We anticipate that institutions may turn towards GLI as a cheaper way to access these core infrastructure assets to better complete their overall infrastructure allocation.

And last, let's not forget about diversification. While the last few years haven't been ideal for GLI overall, the volatile market environment has still at times reminded us that diversification continues to matter. GLI continues to offer relatively stable earnings, inflation-linked revenues, and relatively consistent cash flows, which can play a valuable role in balancing portfolios.

On behalf of Principal's listed infrastructure team, thanks for listening in to our five reasons to consider GLI in 2025. For additional details on what I discussed today, you can find our full 2025 outlook on the Principal Asset Management website. We look forward to speaking with you throughout the year.

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