12 March 2021, London: As investing to support the sustainable energy transition continues to grow as a key priority amongst UK investors, the industry has witnessed diminishing demand for specialist strategies across various energy and natural resources sectors.
Against this backdrop, and following shareholder approval, Ninety One merged its Global Energy and Enhanced Natural Resources Funds into the Ninety One Global Environment Fund earlier this month. The mergers follow a shift in investor appetite away from exclusive energy and resource strategies, reflected in the small size of the two OEIC funds at the time of mergers.
Nigel Smith, Managing Director, UK Client Group at Ninety One, said: “Our focus in these moments is to serve the interests of investors. We are confident that combining these two smaller portfolios with Ninety One’s sector-leading Global Environment Fund is a positive outcome for these investors. Our Global Environment Fund offers investors the potential to really benefit from the multi-year structural tailwinds behind the world’s transition to a lower carbon global economy and it is attracting widespread investor interest.”
The Global Environment Fund, managed by Deirdre Cooper and Graeme Baker, invests in a high conviction portfolio of companies with quantifiable carbon avoided that contribute to sustainable decarbonisation. It uses proprietary screening and carbon analysis to identify stocks, resulting in a concentrated portfolio of companies across renewable energy, resource efficiency and electrification.1
Since inception on 25 February 2019 to end January 2021, Ninety One’s Global Environment strategy has returned 31.6 percent (annualised) compared to its benchmark (MSCI All Country World Net Return index) which returned 12.4 percent over the same period. Prior to the consolidation of these two smaller funds, both have benefitted from a progressive allocation to companies exposed to decarbonisation. The opportunities presented by the Global Environment Fund will therefore not be new for a lot of existing investors.
Nigel Smith, concludes: “As longstanding investors in the energy and natural resources sectors, we have been focused for a number of years on the investment opportunity presented by the transition to a low-carbon global economy and the attractive growth prospects for companies set to benefit from the world’s multi-year process of decarbonisation. As a firm, we will continue to invest in Oil & Gas companies and we will engage with them, both independently and alongside other IIGCC members, to help them focus on being on the right side of the energy transition.”
“At Ninety One we believe that the privilege of investing clients’ money carries with it a responsibility to try to secure a sustainable future. Sustainability with substance encapsulates our commitment to supporting a more sustainable path for the world. We look forward to sharing more on the development of further innovative strategies - like our Global Environment Fund - and exciting appointments in this space, in due course.”
1 Performance is net of fees based on the I-Acc share class in GBP. Calendar returns in 2020 were Fund – 48.0%, Benchmark – 12.7%