Laura Lau, chief investment officer at Brompton Funds in Toronto.Illustration by Joel Kimmel
Although trade talks are driving short-term market swings, money manager Laura Lau is leaning into a longer-term investing trend she believes will outlast the volatility: artificial intelligence.
“Regardless of what Trump does and how the global economy performs, we believe AI is the next big thing,” says Ms. Lau, chief investment officer at Brompton Funds in Toronto, who oversees around $4-billion in assets across various funds.
AI is already transforming a broad swath of industries, but Ms. Lau says it’s still early days and demand is growing for infrastructure and related services to support the rapidly advancing technology.
Her focus is on companies that provide AI infrastructure in sectors ranging from energy and industrials to utilities and communications.
Ms. Lau says she’s playing the AI infrastructure theme across many of the funds she co-manages, specifically the $32-million Brompton Global Infrastructure ETF BGIE-T, which includes companies such as General Electric Co. GE-N, Targa Resources Corp. TRGP-N, Cameco Corp. CCO-T and Welltower Inc. WELL-N.
The fund has returned 14.7 per cent year-to-date and 25.5 per cent over the past 12 months. Its three- and five-year annualized returns are 15.4 per cent and 13 per cent, respectively. The performance is based on total returns, net of fees, as of June 30.
The Globe spoke with Ms. Lau recently about what she’s been buying and selling:
Name three picks from the AI infrastructure theme.
AT&T Inc. T-N, the multinational telecommunications company, is a stock we started buying in May of this year. After underperforming for several years, AT&T’s valuation had become more attractive as the company started to gain more traction with customers. It’s a bit of a turnaround story.
What we like about AT&T is that it’s expanding its fibre network aggressively, and we’ve seen benefits from that in terms of more subscribers and market share gains.
It has also committed to US$40-billion of capital returns between 2025 and 2027, which includes US$20-billion in buybacks.
The company will also benefit from the bonus depreciation in the Trump Administration’s One Big, Beautiful Bill, which will help it invest more in its networks, which are also part of the digital infrastructure needed for AI.
The company pays a good dividend. It’s one of the cheapest U.S. telcos, and we think it’s a good, safe bet. A risk for the company is that it remains a competitive space for acquiring new customers. So, how much might they have to discount products and services to achieve that?
Quanta Services Inc. PWR-N, a specialty contractor in the utilities and electric industry, is a stock we started buying in August, 2023. About 80 per cent of its revenue comes from building and upgrading electrical grids and telecom infrastructure, while the rest is generated from work related to gas utilities. It has a proven track record of delivering complex projects more efficiently than its competitors. We bought it because we saw there would be more demand for renewable power and for upgrading the grid.
A risk to the stock has been the clawback in benefits for the renewable energy sector in the U.S. However, Trump has said he wants to make it easier to generate power, and this company does other power projects beyond renewables.
Hitachi Ltd. HTHIY, the Tokyo-based conglomerate, is a stock we bought on the Tokyo Stock Exchange in February last year. It provides critical technology for electronic components, data centres and electric vehicle manufacturing. It’s also involved in electric vehicle power stations and electrical grids. The company has also become more shareholder-friendly, simplifying its business and communicating more effectively with shareholders about its efforts to improve returns.
Tariffs are an issue for the company, but it has a lot of pricing power due to the way it leverages the data its hardware generates, and it should be able to pass some of those extra costs on to its customers.
Name a stock you recently sold.
NextEra Energy Inc. NEE-N, a U.S. renewable energy producer, is a stock we sold in January. We’ve owned it since our global infrastructure fund was created in April, 2020.
With Donald Trump’s re-election last year, we expected he might change some of the renewable energy laws and tax credits, which would be a negative for NextEra. There has been a lot of negative sentiment toward NextEra as a result, despite its strong fundamentals.
We used the proceeds to buy AtkinsRealis Group Inc. ATRL-T instead, in part because of the positive sentiment surrounding nuclear energy, which the company is involved in developing, as well as its improving fundamentals.
This interview has been edited and condensed.