Hollands says funds that invest in long-term Government-backed projects are particularly attractive in the current uncertain environment as they are often tied in to long-term contracts that are unlikely to be broken.
Infrastructure funds can invest in projects such as schools, hospitals and roads, and Hollands says the way these are financed makes them less risky to investors.
"These are typically very long-life projects, of 25 to 30 years, which are already up and running and with future revenues backed by governments set up under the legal framework of private finance initiatives [PFIs] or public private partnerships [PPPs]."
"This is incredibly important, because it means it is extremely difficult for governments to wriggle out of future payments. So, all this means that the revenues supporting big physical infrastructure projects are very stable and very predictable."
Hollands sees infrastructure as a complementary investment to equity income rather than an alternative.
"We do like equity income at the moment given the current macro issues, like the liquidity measures in the US and Draghi’s decision, and the equity income dividends are well covered."
"But we see infrastructure as more of a niche market and one that investors should look into."
"Infrastructure is a far more specialised sector than equity income and we would advise that it should be a smaller part of your portfolio. However, the yields are strong and stable, with good potential for increased revenue; it is certainly a decent long-term strategy."
Hollands highlights John Laing Infrastructure as a fund that offers investors good potential returns as well as a strong balance sheet.
He said: "[It] currently yields 5.6 per cent and trades at a 2.9 per cent premium. We also like HCL Infrastructure, International Public Partnerships and Bilfinger Berger Global Infrastructure – all of which are listed on the London Stock Exchange."
John Laing Infrastructure, which is co-managed by Andrew Charlesworth and David Marshall, has had a strong run over recent years.
According to FE Analytics, it has returned 13.38 per cent since its launch in late 2010, compared with 3.18 per cent from its IT Infrastructure sector average.
Performance of trust since launch vs sector
Source: FE Analytics
Hollands adds that investors must understand the different types of infrastructure investment before deciding to take the plunge.
"There are two broad types of infrastructure fund: those investing in actual, physical and operational projects – which are typically closed-ended investment companies, listed on the stock exchange – and then a handful of open-ended funds which play an infrastructure theme but in fact invest in equities of companies that might benefit from such projects," he said.
"Examples of equity funds which have an infrastructure theme include First State Global Listed Infrastructure, JPM Emerging Markets Infrastructure and CF Macquarie Global Infrastructure Securities."
However, Hollands believes investors need to display a degree of caution when investing in such funds as, at the core, they are no different to normal equity-based asset management groups.
"It’s important to recognise that these are essentially specialist equity funds which own the likes of listed transport, energy and water companies – and their focus is primarily on total return rather than income, so the yields are considerably lower than the listed physical infrastructure funds," he finished.