Climate Assets monthly update: Hello Sustainable Opportunities

Good news. We are proud to meet the requirements for the ‘Sustainability Focus’ label, demonstrating our robust sustainable investment process. We will adopt the ‘Sustainability Focus’ label as part of the Financial Conduct Authority’s (FCA) Sustainability Disclosure Requirements (SDR) regime. Also, both Climate Assets funds will adopt the new name Quilter Cheviot Sustainable Opportunities. Changes are effective from 8^th September.

The June performance figures for the funds are pleasing: +2.47% and +2.15% for Balanced and Growth, respectively. A key driver of returns was the allocation to chip stocks: Nvidia, AMD & TSMC, within our resource efficiency theme. Stock performance has been driven by strong data centre demand. However, Balanced fund’s returns being ahead of Growth is driven mostly by the contribution of renewable infrastructure: Foresight Solar and TRIG. After a period of underperformance, renewable infrastructure is now closing the gap against their net asset value. Allocation to these UK renewable energy trusts is less in the Growth fund.

Looking ahead, the expiry of tariff reprieves and data points on growth and inflation are potential market-moving catalysts. We anticipate markets to remain volatile and with equities trading at above average valuations, they are more likely to correct around risk events. That said, underlying earnings growth should drive markets higher over time. We also see bonds as offering attractive valuations and yields should move lower.