Die globalen Aktienmärkte verzeichneten im September positive Renditen, da sich die Zeichen einer wirtschaftlichen Erholung fortsetzten und Optimismus im Zusammenhang mit der Entwicklung möglicher Covid-19-Impfstoffe vorherrschte. In diesem Marktumfeld gelang es dem Fonds mit seinem Fokus auf die Sektoren Wasserversorgung und Müllentsorgung, seine positive Kursentwicklung auszubauen. Bertrand Lecourt, FondsManager des Fidelity Sustainable Water & Waste Fund A Acc EUR (WKN A2N7YS, ISIN LU1892829828), liefert in seinem Marktbericht die neuesten Informationen zu Performance und Portfoliostruktur des auf Aktien aus der Wasser- und Abfallwirtschaft spezialisierten Nachhaltigkeitsproduktes. In seinen Managersichten erhalten SJB Investoren wertvolle Details über den in der FondsStrategie SJB Nachhaltig enthaltenen Fidelity-Fonds.
Market Environment
Global equities generated positive returns, driven by signs of a recovery in economic activity and optimism around potential COVID-19 vaccines and treatments. Expectations that global monetary policies will remain accommodative also supported markets. Notably, the US Federal Reserve made a shift in its policy towards inflation and said it would be more willing to allow inflation to overshoot its 2% target for some time following a period of muted price pressures. However, rising COVID-19 cases globally, a delay in additional fiscal stimulus in the US and US-China tensions kept markets volatile. Water stocks performed better than waste stocks during the quarter. From a market cap perspective, small and mid-cap stocks performed worse than their large-cap counterparts. The fund delivered strong absolute returns of 10.7% in net US dollar terms, while the reference index returned 8.1% over the quarter. Water equipment companies and multi utilities were key contributors to performance. Selected waste companies, particularly specialty waste companies, weighed on returns. The fund delivered strong absolute returns of 10.5% in net US dollar terms, while the reference index returned 8.1% over the quarter. Water equipment companies and multi utilities were key contributors to performance. Selected waste companies, particularly specialty waste companies, weighed on returns.
Fund Performance
The fund delivered strong absolute returns of 10.5% in net US dollar terms, while the reference index returned 8.1% over the quarter. Water equipment companies and multi utilities were key contributors to performance. Selected waste companies, particularly specialty waste companies, weighed on returns.
Notable contributors
The position in water and waste firm Suez was the largest contributor to performance as Veolia (another holding in our portfolio) made an offer to acquire Engie’s 29.9% stake in Suez. China Lesso, a leading large-scale industrial group, was another notable contributor to returns. The company made strong progress in the last few years, driven by a strong management team with a good track record of cost controls. The share price of Advanced Drainage Systems (ADS), which produces plastic corrugated pipes and other drainage products, traded up following a stronger-than-expected earnings report.
Selected holdings weighed on performance
Shares in Brazilian state-run water and waste utility Sabesp fell after the Sao Paulo state governor raised the possibility of a capital increase, but also mentioned that privatisation is still an option. The company’s fundamentals remain good, and either privatisation or a capital increase should improve governance and bring efficiency. Hazardous-waste names, including Clean Harbors detracted from returns, indicating a slowdown in energy and industrial activity. Waste management company Covanta also underperformed following a dividend cut announced in April and investor concerns around its exposure to struggling commodity prices. We continue to believe in the long-term prospects of both companies.
Fund Positioning
The fund employs a distinctive, replicable bottom-up investment process with an overarching emphasis on sustainable investments. This is a thematic ESG fund that seeks to deliver long-term capital growth over the market cycle by investing globally in companies that are involved in the water and waste management sectors. The fund has the ability to invest across the water and waste value chains, including in companies that are developing new technologies to meet the ever-growing demand for such products and services.
Investments driven by long-term mega trends
The managers believe that water and waste management related investments are driven by long-term mega trends and should potentially generate long-term investment returns. They aim 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, which includes population growth, environmental constraints, supportive regulations, urbanisation rate and global wealth creation. Given the current situation, it is important to keep a balanced portfolio.
Key trades
While there has not been a huge amount of trading activity, we continue to make small adjustments to the portfolio and focus on bottom up stock selection. We sold our positions in China Water Affairs Group and TTW as their valuations appeared stretched.
