Deirdre Cooper
A new whitepaper, attached, discusses what a decarbonisation strategy benchmarked against MSCI ACWI can offer those with a diversified global equity portfolio, something different in terms of portfolio composition and return profile.
Summary
Efforts to cut carbon emissions are driving vast flows of capital, creating a major structural growthtailwind for select companies. The paper argues that an investment strategy focused on ‘decarbonisation’ has the potential to generate above-market returns and contribute to positive real-world impact.
The paper highlights the significant difference between the positions held in the Ninety One Global Environment Strategy and the MSCI ACWI, indicating that it may complement a global equity allocation and offer diversification benefits. The high-conviction, highly concentrated portfolio has historically generated alpha at different times to common equity styles, which can help to smooth an overall portfolio’s alpha through time.
The Ninety One Global Environment Strategy invests exclusively in leading climate-solutions companies, which are expected to benefit from a long-term structural growth tailwind as global efforts to cut emissions continue, focusing on three pathways to a low-carbon future: renewable energy, electrification and resource efficiency.
The Global Environment Strategy has little overlap with global equity benchmarks and has historically offered a differentiated return signature. The analysis provided here indicates that it can be a valuable addition to a core global equity portfolio.
By Deirdre Cooper, Head of Sustainable Equity, Graeme Baker, Portfolio Manager and Atul Shinh, Investment Director .
