Portfolio manager Marcus Björkstén’s thoughts on the US election: Fondita Sustainable Europe – Biden could give a boost to the fund´s thematic focus

Sustainable Europe

2020-11-13

Fondita Sustainable Europe invests in European companies which have a product or service that enables us to reach set goals regarding Co2 reduction and efficient use of natural resources. The fund has had an outstanding performance so far and the fact that Biden is set to be the next president of the US is likely to give an additional boost to companies with exactly this exposure.

Even though it seems unlikely that the democrats will win the Senate and are therefore are unlikely to immediately unleash a green wave of sustainability efforts, there are still many positives from Biden as president from a sustainability focus.

  • Biden has promised to re-join the Paris Agreement. This does not require approval from the senate and is effective only 1 month from notification. This means that by February the US would be part of the Paris Agreement. This would mean that the US would be committed to decarbonize by 2050. This would most likely give a boost globally to ambitions and efforts to reach the set targets. Biden has been quite clear that the ambitions to decarbonize means investments in renewables.
     
  • Biden has not been clear on ambitions towards Sustainable Finance (in this area Europe is many steps ahead) but it could very well be that some targets and regulations would be set in this area as well. This in turn would mean significant capital flows towards companies that are considered as “part of the solution” rather than” part of the problem”.
     
  • Biden can also reverse Trump’s efforts to roll back approx. 125 previous climate and environmental policies, e.g. remove legal actions against the Clean Air Act, the Clean Power Plan, and the ability of states (e.g. California) to set own vehicles’ emissions standards.
     
  • There is a lot the president can do through executive orders. Some of the day-1 orders Biden mentioned include e.g. introducing limits on methane emissions, higher vehicle fuel economy standards under the Clean Air Act and new requirements in the federal procurement for clean vehicles and energy sources.

Fondita Sustainable Europe performance vs MSCI Europe since 1.3.2019 (sharpened thematic focus and new fund name)

GrafMacke

 

 

 

 

 

 

 

Source: Bloomberg 

RISK INFORMATION:

The past performance of the investment fund does not provide any guarantee of future results. Depending on market conditions, the fund unit value may rise or fall. The future performance of the fund depends on the development of the markets and the Fund Manager’s success with the chosen investments. The fund is euro denominated. Thereby changes in currency values may affect the value of the investments. The fund is not covered by the Deposit Guarantee Fund nor the Investor’s Compensation Fund.

Text written by portfolio manager

Macke

 

 



Marcus Björkstén

Our Funds