Bericht des Fondsmanagements (Stand: 31.12.2018)
The sector sold off in December together with equity markets in general as there was continued several disappointing economic news and generally a lot of fear tied to the economic outlook and trade uncertainty. DNB Fund C Renewable Energy sold off in December and performed weaker than MSCI World and the NEX sector index. AMG Advanced Metallurgical Group was the largest detractor as market appetite for lithium/vanadium names was falling in light of lower global commodity prices. SunRun also declined, tighter corporate debt markets drove up spreads compared to initial expectations for its new debt issue. On the positive side, the fund gained in Enel which continued its positive momentum from the supportive capital markets day in November. There have been many data points recently illustrating that the economy and the earnings outlook is getting tougher. Based on this, it seems to be a very broad sell©off and the market seems to forget that there are many more independent cycles and they are not all driven by the economy. The growth in renewables is to a large extent structural. Climate change evidence and cost is growing. There are strong themes for 2019, namely cost competitiveness, transport electrification and continued efficiency adoption. Through bottom©up stock selection we argue the portfolio offer exposure to many names that are sold off too heavily due to cyclical fear. The fund multiple is at a discount to the market, despite premium structural earnings growth. A theme for 2019 is that many names will also have strong cash flow growth. Based on this we consider risk/reward outlook to be positive.