February got off to a good start and Markets were up by nearly 5% within the first couple of weeks due to positive news on the Vaccine front. However, the recent Covid package agreed by the US has put a bit of pressure on Markets over concerns that interest rates could rise as this is the usual way of tempering inflation, which could be a by-product of the rescue package. We saw markets drop back but still managed a modest gain for the month.
The following chart shows the US and UK market during December. The FTSE 100 represents the 100 largest companies in the UK and the S&P 500 represents the 500 largest in the US. The Dow Jones is often quoted but this only shows the top 30 companies and is dominated by technology companies.
As explained in our recent communication regarding the ongoing format of monthly newsletters, this month there is a focus on one of the funds we recommend.
Pictet Global Environmental Opportunities
This fund is held within our Socially Responsible Investments (SRI) portfolios Melodic 3- 6 and represents between 5-7% of the asset spread with in these portfolios.
Socially responsible investments have become more popular with investors over the last few years appealing to investors who have a preference towards avoiding investing in companies that produce or sell addictive substances (such as alcohol, gambling and tobacco) in favour of companies that are engaged in social justice, environmental sustainability and alternative/clean energy and technology.
Pictet are a Geneva based company, established in 1805 and have offices across the world in places such as London, Hong Kong, Tel Aviv and New York to name a few.
With over 4800 employees worldwide, $689Bn of assets under management and a liquidity coverage ratio of 182%, Pictet are one of the strongest investment led companies in the industry.
The Global Environmental fund holds £7,297.17m.
The fund launched in September 2010 and is managed by 3 fund managers each offering specialist knowledge in the sustainable and renewable industries.
The fund is split across various socially responsible sectors with its highest exposure to the Energy Efficiency sector (35.51%), Renewable Energy sector (13.39%) and Pollution Control sector (13.30%)
Within the fund’s top ten holdings, Vestas Wind Systems (4.3%) are their largest holding followed by Applied Materials Inc, On Semiconductor Corp and Synopsys Inc.
Vestas Wind System is a Danish company that designs, manufactures, installs and services wind turbines globally. It has installed turbines in 83 countries representing more wind power than any other company. It recently won a contract to supply onshore turbines in Scotland adding to the current total of over 2,000 wind turbines in the UK.
Overall, this fund is a well performing diversified fund which compliments the other funds held within our socially responsible portfolios.
If you would like to talk to us regarding socially responsible investments, please do not hesitate to give Ian or Oliver a call as they will be happy to discuss any options with you.
The information provided in this report is based on our own opinion and offers no guarantee that expectations will be met. Past performance is no guide to future results. As always, should you have any concerns you wish to raise, please do contact us.
Due to the current Covid situation we have closed the office but are still working full time. We are available via telephone and video so please do contact us on 0791 665 2034 for Ian and 0796 459 4210 for Oliver.
Keep safe
