Stockholm (NordSIP) – When it comes to investment in renewable energy, some European funds are increasingly looking Eastward and to emerging markets. The reasons are manifold, but include the explosion in Chinese renewable energy production and investment and the uncertainty of the U.S. position on climate change under the current administration.
One such fund is the AA-rated Vontobel Fund New Power B, a fund offered by Zurich-based bank Vontobel’s Vontobel Asset Management that invests in the securities of companies offering new technologies and innovative solutions aiming to achieve more efficient energy use and increase the use of alternative sources.
As Portfolio Manager Pascal Dudle explains in an interview with Citiwire, the fund has expanded its investments in emerging markets on the strength of particularly Chinese renewable energy producers, who are moving fast despite lagging somewhat in terms of the science and technology subtending e.g. European wind and turbine production. Vontobel nevertheless holds positions in, for example, Chinese wind turbine producer Longyuan Power Group Ltd. on the strength of strong competition when it comes to market share.
In related news, and in a reflection of China’s increasing drive towards sustainability and sustainable investment – an area where it has seen a clear advantage in light of the U.S. withdrawal on the issue on the global stage – the UN PRI just this week appointed its first head of China. Appointee Nan Luo will work closely with Chinese institutional investors on RI initiatives such as green finance, as well as a number of external bodies such as the Asset Management Association of China and the Green Finance Committee.
Nevertheless, Vontobel’s biggest exposure remains to developed markets, in particular the U.S. Asked whether the anti-environmental policies of U.S. President Donald Trump have impacted Vontobel’s allocation to the U.S., Dudle points out some of the negative aspects of Trump’s impact on the renewables industry while expressing hope that the president’s overall impact will be limited by the fact that most programmes and projects occur at the local state level as opposed to the federal one, there being signs these will continue unimpeded.
Vontobel’s exposure is relative to the broader equity market, which is underweight in the U.S. by comparison to the MSCI world, he says, and names Universal Display Corporation, a developer of organic light emitting diodes, as a stock that has worked well for Vontobel’s portfolio.
Watch the interview here.
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