"An airport is a place where you go through hell to reach your alleged paradise.” That quote from horror writer Stewart Stafford is kind of how 4D infrastructure's Sarah Shaw feels about airports—particularly the American variety. Asked about the Biden administration’s $2.25 trillion infrastructure program, Shaw has some firm ideas on where she thinks this “pot of gold” should be spent.

“I think a great opportunity for the US if they want to spend this money is to privatise the airport network," Shaw told us this week. "The airports are horrible. Just simply doing that you’d get trillions of dollars in investment.”

One type of airport Shaw does like, however, are those further south in Mexico, which in her view are regaining their pre-covid vigour following the harsh sell-off. Shaw, who oversees 4D's global infrastructure fund, says Mexico’s airports are leading the recovery by resetting regulations, passenger forecasts and how much they expect to spend and gain. And crucially the traffic is recovering.

“They’re moving forward beyond the covid passenger hit,” Shaw says. “Secondly, they’re seeing traffic come back really, really quickly. Their traffic is only 19 per cent below 2019 levels—significantly better than what we’re seeing in other parts of the world. And that’s expected to continue. Airlines in Mexico point out that their capacity in the second quarter is 110 per cent of what it was in 2019—higher than pre-covid levels.”

Mexico and the US are discussing relaxing curbs on non-essential land border crossings from 22 June, depending on the spread of COVID-19 and how many people in both countries have been vaccinated, Mexico's foreign ministry said on Tuesday. Mexico, population 126 million, has so far administered nearly 24 million vaccine doses against covid-19.

Airports are just one part of listed global infrastructure, which Shaw thinks is the theme for the next 50 years. “The opportunity set has never been more attractive. But five years is a good timeframe to realise the investment that is happening now."

As the chief investment officer of a global infrastructure fund, Shaw is bound to say such things. But still, it's hard to be cynical, particularly when you consider the growing needs of China’s middle class—widely seen as a key source of growth. And to hear Shaw spell it out, you get an idea why that's the case. You can catch the full interview with Shaw, plus her recommendations, next week. 

A picture of a passenger plane on the tarmac at night

In Firstlinks this week, Graham Hand returns with part two of his must-read on the perils of buying apartments off the plan. And a warning, it makes for grim reading. “Apartment buildings are sometimes shared by hundreds of people,” Hand writes. “Don’t assume they read Jane Austen each night. Australia’s top-rating television programme is Married at First Sight. Those cretins you ridicule on television are your new neighbours.”

Elsewhere this week, in an illuminating two-part Investing Basics column, Emma Rapaport shows you how to build a simple, low-cost core portfolio with ETFs.

Rapaport also examines the rise in thematic funds via five compelling charts. ETFs that track megatrends are soaring in popularity but there are risks to consider before you jump in.

Lewis Jackson asks Gareth James why accounting software provider Xero remains expensive despite a fair value upgrade.

Robotics is a fast-growing area of tech, creating opportunities in medical, logistics and life sciences sectors and much more. Holly Black discusses two key stocks.

The website builder Squarespace is about to go public. It sees growth opportunities but faces stiff competition, writes Margaret Giles.

We examine the Morningstar Dividend Yield Index, a cross-section of the Australian economy, featuring wide and narrow moat names.

Find out which boutique Aussie bond fund tops Morningstar’s “ESG commitment” leaderboard and why most Aussie funds are still behind when it comes to best practice on global environmental, social and governance criteria.

We talk to American Century Investment's Patricia Ribeiro about emerging markets and growth in Chinese battery technology, biologics, and building materials in Latin America.

John Rekenthaler explains why Wall Street issues so many buy recommendations—and why that should worry you.

Real estate investment trusts have benefited from the reopening and are set to pay dividend yields of up to 7.5 per cent, writes Nicki Bourlioufas.

Morningstar has downgraded its valuation for infant formula maker A2 Milk as it grapples with weak growth. But it's still attractive despite near-term woes.

And finally, in Your Money Weekly, Peter Warnes tips conventional thinking about retirement income on its head by arguing there’s absolutely nothing wrong with harvesting capital to fund your retirement expenses.

“In the retirement phase, does the composition of the total shareholder return between income and capital growth really matter?” Warnes writes. “Is there a difference between a stock yielding 6 per cent with 1 per cent capital growth and one yielding 1 per cent with 6 per cent capital growth?”

We trust you enjoy the content.