National Grid

What does the company do? National Grid is a new holding in the portfolio this year. The company’s primary business is the transmission and distribution of electricity and gas across the UK and the northeastern United States. Governments recognise the investment required to upgrade aging electricity networks in order to address energy security and the clean energy transition. In the UK, the Government plans to increase offshore wind capacity to 50GW by 2030. This will require substantial expansion of the electricity transmission grid in order to get the electricity from where it is generated, in the north, to where it is consumed, in the south. In the US, growth is underpinned by a long-dated pipe replacement programme and capital expenditure to support the transition. Why do we like the investment? National Grid intends to invest £42 billion in its UK and US networks over the next five years, with £32 billion dedicated to decarbonising the grid. National Grid is well positioned to deliver strong asset growth for several years, which will support visible returns and earnings growth. The company is also committed to maintaining its credit rating and offers an attractive dividend.