Bericht des Fondsmanagements (Stand: 31.03.2019)
The sector underperformed the MSCI World in March after having outperformed in the beginning of the year. YTD the sector and fund are both well ahead of MSCI World. MSCI World rose despite continue rather weak economic news. We believe the current weak economic development is temporary. DNB Fund - Renewable Energy fell in March after a very strong start to the year in January and February. Some of this can be explained by the development in certain commodities, for instance Ferrovandium which have been falling a lot more than we expected so far this year. This is putting pressure on top decliner this month, AMG Advanced Metallurgical group. On the positive side, rare earth supplier Lynas received a surprising opportune bid from retail chain Wesfarmers. Lynas was the top performer this month. Nordex also rose after issuing better than expected outlook. The fund is trading at a valuation discount to MSCI World, despite offering higher expected earnings growth. The fund currently trade at 9.3x, which is also towards the lower end of the historical range. 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.