Stand: 31.10.2022
Performance Based on transaction prices, the fund s return was -2.90%. The Renewables cluster showed the strongest performance in August, driven by solar companies and renewable power producers, due to strong single-stock selection. This was driven by earnings upgrades for renewables companies exposed to the US following the Inflation Reduction Act, which is a big tailwind for the development of the US market as 1) it strongly increases visibility for both renewable energy and green hydrogen development and 2) brings the US back on the climate change reduction path. Energy Management was the second-strongest cluster, driven by continued good performance of the Energy Storage sub-cluster, where the battery and lithium supply stays tight and consequently pricing robust, whereas the Semiconductor Power Management sub-cluster gave back some gains from the previous month. The Energy Distribution cluster was a detractor from the overall fund s performance in the month due to the high sensitivity to interest rate hikes of the Electric Networks sub-cluster and recession fears hitting the European-exposed companies in the Equipment Suppliers sub-cluster. The Energy Efficiency cluster underperformed and the overall risk sentiment deteriorated. Market development Global stocks continued to perform well in the first half of the month but were brought back down to negative territory at the end of August by hawkish comments of Fed Chair Jerome Powell during his Jackson Hole speech. Commodity as well as oil prices stabilized somewhat after the sell-off in the previous month, reflecting the current uncertainty at the crossroad of increasing recession risks and central banks still fighting high inflation. In contrast, natural gas and consequently also electricity prices in Europe continued their upward movement, as uncertainty about future deliveries of natural gas continued. Russia announced another unexpected 3-day maintenance period from 31 August for the main pipeline Nord Stream 1 to Germany. Inflation numbers around the world remain elevated, as supply chains only slowly improve. Expectation of fund manager Signs are emerging that inflation may have peaked, while growth fears are starting to concern investors. Long-term yields in the USA show signs of stabilization, while European yields are catching up with still increasing inflation rates. Uncertainties around further geopolitical escalation and a consequent further rise in energy prices remain a risk for the months to come. Fundamental drivers for the Smart Energy strategy remain as strong as ever. The relatively low interest rate environment and sharply rising energy prices should further support the buildout of renewable energy and incentivize investment in energy efficiency and the electrification of the energy system. The recently passed Inflation Reduction Act (IRA) brings the USA back on its ambitious decarbonization path. Long-term incentives for renewable energy, green hydrogen and storage solutions provide a very promising framework and increase the growth outlook substantially.