The NSF Climate Change+ fund is flying in 2023, with a cumulative return of 16%. The average annual return in the last three years is more than 20%. Its manager, Gregg Supravsky (Brussels, 1995), believes that all the conditions are still in place for this investment theme to continue offering an extra return on the stock market in general.
The fund that manages climate change is one of the first to be launched…
Yes, it has a very long history. The manager launched it in 2007. First it was a fund of funds and then it began to make direct investment. She has always sought to invest in companies that could help mitigate climate change and global warming. Now we usually have around 50 portfolio companies.
What types of stocks do you invest in?
In circular economy, like recycling companies. Also companies that improve energy efficiency, in which we include semiconductor firms, which are becoming more and more important. Another theme is the production of clean energy. And the last one, sustainable mobility, where we invest, for example, in electric car companies.
What companies do you have in your portfolio in the area of energy efficiency?
Take, for example, the Irish-based insulation company Kingspan. He has participated in the insulation of large infrastructures, such as the Burj Kalifa tower, the tallest building in the world. We also have others that are more oriented towards reconditioning simpler buildings, offices or apartments. In Europe there is legislation underway that is going to be more and more demanding with this issue. In a few years it will not be legal to rent offices if they do not prove that they meet minimum requirements in terms of energy efficiency.
And in renewable energies?
We are very interested in going through the entire supply chain. We do not want to focus only on companies that produce green energy, but we look for manufacturers of windmills, such as Vestas. Or firms specialized in manufacturing high-voltage cables, which are essential to be able to install this type of infrastructure. Some are receiving contracts to install submarine cables that allow the electrification of islands or the connection of offshore wind farms with the electricity grid.
Does the fund have the highest rating in terms of sustainability?
Yes, we are what is called article 9, which recognizes us as a product that invests in companies that pursue very specific objectives in the field of environmental protection.
Sometimes there will be certain types of companies that raise doubts…
That’s how it is. A good example is the companies that manufacture electric batteries. To do so they need to buy certain materials whose extraction in mines can be very compromised. In those cases we have to weigh very carefully the pros and cons of this type of investment.
And in the end, do you invest in battery manufacturers?
One of the problems we find is that almost all the big manufacturers are in Asia. Sometimes they are part of large conglomerates, which have nuclear power subsidiaries, and we cannot directly invest in the electric battery business. This happens especially in Japan. We also have difficulties accessing these companies in China.
Do they have Tesla in their portfolio?
Yes. Sometimes it is not easy to explain the investment thesis, because it trades at very high prices. Also, it is not a pure car manufacturer. He also has an aerospace business, like Space X. Or his solar panel company. But fundamentally we believe in the vision of Elon Musk, which is reflected very well in Tesla. We believe that Tesla has ended up becoming the iPhone of cars. I don’t think it will ever be a $3 trillion valuation company, unless it becomes a much more technological firm. But it is worth having in your portfolio.
You are way ahead of the competition with chargers…
Its superchargers allow electric car batteries to be recharged much faster than the competition. That is why rivals like Ford have reached an agreement to be able to use them. The recharging speed was one of the main problems for the adoption of this type of vehicle.
Why invest in semiconductors?
We have more and more electrical devices and, at the same time, we want to use more and more clean energy. To make that transition we need devices that are increasingly efficient and intelligent. That is why the role of the companies that manufacture chips and the entire semiconductor industry is so important.
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