Die globalen Aktienmärkte zeigten im Oktober eine freundliche Kursentwicklung, wovon auch die Sektoren Wasserversorgung und Müllentsorgung profitieren konnten. Bertrand Lecourt, FondsManager des Fidelity Sustainable Water & Waste Fund A Acc EUR (WKN A2N7YS, ISIN LU1892829828), gibt in seinem Marktbericht Einblicke in die Portfoliostruktur und Performanceentwicklung des auf Firmen aus der Wasser- und Abfallwirtschaft fokussierten Nachhaltigkeitsproduktes. In seinen Managersichten erhalten SJB Investoren die neuesten Informationen über den in der FondsStrategie SJB Nachhaltig enthaltenen Fidelity-Aktienfonds.
Market Environment
Global equities advanced in October as the US and China inched closer to finalising the first phase of their trade agreement. The former also suspended a tariff hike on Chinese goods that was to have come into effect during the month. On the policy front, the US Federal Reserve (Fed) lowered interest rates amid muted inflation pressures and concerns about the economic outlook, thus boosting US equities. European stocks delivered positive returns on a better than expected third quarter results season against lowered consensus expectations. UK markets rose (in local currency terms) on falling expectations of a no-deal Brexit. Members of the British Parliament rejected Prime Minister Boris Johnson’s three-day accelerated timetable for acting on a new Brexit deal with the European Union (EU). Subsequently, they voted in favour of the PM’s fresh election proposal in order to break the Brexit deadlock. Equities in export-oriented Japan registered a strong increase for a second consecutive month in October on global cues and improved consumer confidence. At a sector level, health care and information technology (IT) led gains.
Fund Performance
The overweight stance in the water utilities sub-sector and strong stock selection among building products companies contributed to returns, but the weak performance of selected holdings among the commercial services & supplies and diversified consumer segments offset these gains. At a stock level, Covanta, one of the world’s largest providers of Energy-from-Waste (EfW) solutions, was the leading detractor. While the company’s third-quarter earnings beatexpectations and it has a robust international project pipeline, the uncertain waste pricing environment and the downtrend in scrap metal and power pricesnegatively impacted sentiment. The holding in Italian group Interpump, one of the world’s leading companies in the hydraulic sector, was another notableamid concerns over slowing like-for-like organic growth. Nevertheless, consensus estimates and the company’s own guidance points at positiveorganic growth in the second half of 2019. Interpump is competitively positioned in niche markets which is expected to support strong profit margins and cash. Service Corporation International, a leading provider of deathcare products and services in North America, was another notable detractor. On apositive note, Advanced Drainage Systems, a leading global manufacturer of water management products and solutions, was the leading contributor, as investors continued to be encouraged by the company’s attractively positioned core corrugated plastic piping business which continues to grow. Meanwhile, within the interest rate-sensitive utility sector, the position in UK water utility group Pennon Group advanced, supported by a lower interest rate environment.
Fund Positioning
The fund employs a distinctive, replicable bottom-up investment process, focusing on quality and growth, with an overarching emphasis on sustainable. This is a thematic Environmental, Social, and Governance (ESG) fund that seeks to deliver long-term capital growth over the market cycle by globally in companies involved in the water and waste management sectors. The fund manager believes that water and waste management related investments are driven by long-term mega trends and should potentially generate strong long-term investment returns. He aims to achieve this by adopting a long-term view of company fundamentals using substantial internal and external resources to analyse the profit drivers of each company by region, division and product. The strategy has a supportive environment that is backed by a global mega-trend. Population growth, environmental constraints, supportive regulation, urbanisation rate and global wealth creation are all working conjunctively in its favour. The portfolio’s main overweight positions are in the commercial services & supplies, water utilities and machinery segments. At a stock level, the biggest overweight position is in Woongjin Coway, a household vacuum cleaners company based in South Korea, and Veolia Environnement, a French transnational company with expertise in water management, waste management and energy services. American Water Works, a public utility company, which has a long runway of rate base growth that is de-risked and a strong balance sheet, is another notable position.
