The fund manager Wilson Asset Management (WAM) has recently identified some S&P/ASX 200 Index (ASX: XJO) shares that it owns (or owned) in one of its main portfolios.
WAM operates several listed investment companies (LICs), including WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).
There's also one called WAM Leaders Ltd (ASX: WLE) that looks at the larger businesses on the ASX, often referred to as ASX blue-chip shares.
WAM says WAM Leaders actively invests in the highest quality Australian companies. But does WAM have a good reputation for picking stocks?
The WAM Leaders portfolio has delivered gross returns (before fees, expenses, and taxes) of 15.2% per annum since its inception in May 2016. This compares to the S&P/ASX 200 Accumulation Index average return of 9.2% over the same period.
The fund manager commented that infrastructure is a key theme in the WAM Leaders' investment portfolio given the "high-quality names" with defensive, inflation-linked cash flows sheltered from the full severity of the economic downturn.
It also said that infrastructure names are yield sensitive and will benefit from central banks pausing rate hikes. The fund manager said, "This is the economic environment we believe we are facing over the coming years."
WAM outlined these ASX 200 shares in its recent monthly update.
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Transurban Group (ASX: TCL) and Atlas Arteria Group (ASX: ALX)
Both of these businesses are toll road companies, which are involved with developing, operating, and maintaining toll road networks.
Transurban is mostly Australian-based, with roads such as CityLink in Melbourne and WestConnex in Sydney.
Meanwhile, Atlas Arteria operates in France, Germany, and the US. The most recent Atlas investment is the Chicago Skyway, a 12.5km transport link in the US's third largest metropolitan area, with a concession life of more than 80 years.
WAM said that the investment team believes both ASX 200 shares will offer "strong earnings growth over the coming years as well as significant dividend yields".
APA Group (ASX: APA)
The fund manager described APA as an energy infrastructure business playing a "key role" in Australia's energy transition. This includes a range of opportunities from "expanding the East Coast Grid to bring gas to southern markets ahead of forecast shortfalls as well as building new renewable energy solutions".
The investment team at WAM Leaders explained:
We remain positive on this business with 85% of its revenue guaranteed through its take-or-pay revenue agreement, positive inflation exposure and 100% interest cost hedging over the next six years.
