Bericht des Fondsmanagements (Stand: 30.06.2019)
The sector outperformed the MSCI World in June. Overall it was a positive month for equities as some of the recent concern around trade wars declined. Overall macro was weak as this was also reflected in falling global interest rates. June saw a strong recovery with substantial outperformance vs both the sector and MSCI World. Some companies that sold off during May gave comments during investor meetings that appeared more upbeat versus what the market was fearing, including Dana and American Axle. Some companies are also initiating potential shareholder friendly moves, like AMG Advanced Metallurgical Group that will now investigate a spin of AMG Technologies to unlock value. There seem to be a growing believe in global warming and that this needs to be dealt with sooner rather than later. G20 and EU are examples, and a new bill in New York Policy with targets to exceed the Paris agreement will create investment opportunities. Bloomberg New Energy Outlook report again showed the transition can be done more and more economically. We had many meetings during the month. It was very clear that solar demand is currently strong across the globe. We bought some shares, but for many stocks it could be a bit too late to the party. We still think First Solar offer best risk/reward in the space. The fund is trading at a valuation discount to MSCI World, despite offering higher expected underlying earnings growth. The fund currently trade at 10.2x forward EV/EBIT. The growth in renewables are to a large extent structural, and perhaps less cyclical than what the market is discounting. Climate change evidence and cost is growing. The sector is also increasingly cost competitive. Many names in the portfolio will also deliver strong cash flow growth in 2019 and beyond. Based on this we consider risk/ reward outlook to be positive within the equity space.