SJB | Korschenbroich, 22.11.2023.
Der Oktober war ein schwieriger Handelsmonat für globale Aktien, da zunehmende geopolitische Spannungen, eine höhere Marktvolatilität sowie schwache Quartalszahlen die Börsen belasteten. Im Berichtsmonat entwickelte sich innerhalb der Pictet-Umweltstrategie der Sektor Abfallmanagement und Recycling am besten, wobei sich die Aktien von Unternehmen wie WM und Republic Services stark zeigten. Schwächer tendierten hingegen Werte aus dem Bereich Energieeffizienz sowie Wasser-Aktien. In einem angespannten Marktumfeld generierte der Pictet – Global Environmental Opportunities P EUR (WKN A1C3LN, ISIN LU0503631805) eine Wertentwicklung von -5,23 Prozent auf Monatsbasis, notiert seit Jahresbeginn aber weiter mit +1,92 Prozent im Plus. Der aktuelle Monatsbericht von Pictet-FondsManager Luciano Diana analysiert für alle Investoren der FondsStrategie SJB Nachhaltig die Veränderungen im Portfolio und liefert einen Ausblick für die Aktienmärkte des Environmental-Sektors.
Market Review
October was a tough month for global markets, with most asset classes finishing firmly in the red. Increased geopolitical tensions, particularly in the Middle East, higher market volatility and mixed earnings news all dampened investor sentiment. Equities lost 2.7% in aggregate in local currency terms. The weakness was widespread, spanning all major regions and affecting both developed and emerging markets. Although third-quarter results for both S&P 500 and STOXX 600 companies have so far beaten expectations, revenue growth has been muted and guidance for the future has remained largely unchanged. An 8% drop in oil prices dragged down energy stocks. Meanwhile, concerns about economic growth weighed on cyclical sectors such as industrials, consumer discretionary and materials. Even the IT sector – this year’s star performer – finished the month in the red. Utilities was the only sector to eke out a small positive return.
Performance Analysis
The strategy underperformed the MSCI ACWI during October. Waste Management & Recycling stocks outperformed, led by WM and Republic Services, which reported strong quarterly earnings and resilient pricing. Sustainable & organic food companies Symrise and Givaudan also contributed strongly as signs of volume improvement and a stabilisation of customer destocking drove earnings upgrades. Dematerialized Economy was mixed in the period, as strong earnings performance drove upgrades at Dassault, Synopsys and Cadence, but this was offset by weakness at Ansys, which de-rated on concerns of near-term order volatility. The Water segment was also mixed, with upgrades at Xylem offset by weak performance at American Water. Energy Efficiency detracted in October, led by power semiconductor stocks Onsemi and Infineon, where earnings expectations declined on a reduction in demand from the automotive vertical. Pollution Control also detracted as a continued subdued investment backdrop in pharma and biotech reduced earnings expectations for Agilent and Thermofisher. Despite robust quarterly results, some companies with construction-related exposure such as Schneider Electric, Carrier Global de-rated on market concerns of negative impacts from higher interest rates.
Portfolio-Aktivity – Under- and Overweightings
During the month, we added to our exposure in Sustainable Agriculture & Forestry and Waste Management & Recycling, and reduced exposure within Energy Efficiency and Dematerialized Economy. Within Sustainable Agriculture & Forestry, we increased our positions in sustainable & organic food companies Givaudan and Symrise, given easing headwinds from customer destocking and early signs of volume improvement. In Waste Management & Recycling, we added to our positions in WM and Waste Connections on the robust demand outlook. In Energy Efficiency, we took some profits early on in the month in semiconductor stocks such as Applied Materials, ASML and Infineon following strong year-to-date performance. Similarly, we took some profits in Dematerialized Economy in PTC, Dassault and Ansys. In Pollution Control, we exited Danaher following the spinout and listing of Veralto, which was its Environmental & Applied Solutions business unit. Veralto sits within our Water Supply & Technologies segment and is a global technology leader across the fields of water and product quality.
Market Outlook
Energy Efficiency and Dematerialized Economy, two of our largest portfolio segments, continue to show strong fundamentals. Demand for energy-saving technologies remains robust, and our companies are starting to benefit from the positive impact of the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) in the US. These represent a multi-year investment cycle for semiconductor and battery plants, electricity grid modernization, renewable energy capacity, green buildings and EV infrastructure, which adds growth and revenue visibility to our companies. As a consequence of this, the end-market demand for environmental services within the Pollution Control segment also remains very healthy, particularly in the US. Within Dematerialized Economy, demand for simulation software, Electronic Design Automation and Product Life-Cycle Management solutions is accelerating. US Waste Management companies will continue to experience positive business trends. In general, most of our portfolio holdings have sufficient pricing power and balance sheet strength to navigate well in the current environment. Supply chain constraints are easing and this should provide a tailwind for margins in the coming months.
Portfolio Strategy
Our strategy focuses on investing in environmental solutions providers. Exposureto environmental trends offers investors attractive risk-adjusted returns, regardless of the stage of the economic cycle. We favour solutions providers withwide economic moats, robust profitability, healthy balance sheets and businessmodels that don’t rely on government subsidies. Our bottom-up investmentprocess results in a concentrated global portfolio with a growth and quality bias.Long term, the trends of population growth and rising living standards areinescapable and so is the growing strain on natural resources. Awareness ofenvironmental issues has grown tremendously in the last few years and is now deep-seated, top of mind for an entire generation of citizens, consumers and investors.
Pictet – Global Environmental Opportunities Management Team
Luciano Diana
Gabriel Micheli
Yi Du
