Transurban (TCL) is a stock that doesn’t like higher oil prices, (less driving in general, less miles in specific) or higher interest rates (as a) debt servicing costs rise, and infrastructure stocks are geared beasts by necessity, and b) are long duration, meaning they are highly sensitive to changes in the discount rate).

It is the change in stuff, that matters, so despite my poor labelling on rates, the factor loadings line up with what we’d expect. 10 year nominal rates are the simple addition of real rates and breakevens (we split them here because the give us more colour on what is driving returns) and we also include the level of real rates.


Despite that, the share price has held up somewhat better than I’d have expected. Trending down, sure, but really only half of the 2019 outperformance.


It is a widely held favourite with fund managers, and retail punters, alike, which probably helps keep it trading above where we’d expect.

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