Munro has initiated a new theme of climate change in its Global Growth portfolio as it believes the sector has become even more important since COVID-19.
In a webcast, chief investment officer, Nick Griffin, said the climate change theme was sub-divided into four sectors; clean energy, batteries, building efficiency, and packaging, water and waste.
“Climate change is a new theme in the portfolio, it has become even more important in the COVID era and we see it accelerating from hereon. We have six climate-focused companies, it is a growing area and there are opportunities in some smaller companies,” Griffin said.
Griffin likened it to the early stages of the technology boom with climate change companies expected to “get dramatically bigger” in the future. Wind turbine firm Vestas had already been one of the best contributors to performance in September.
“Momentum is stronger than it has ever been, it is important for companies and stakeholders. We are at the start of the big theme, more and more companies [in this sector] are going to get dramatically bigger,” he said.
“In Europe, they are targeting zero carbon by 2050 which means they will produce no CO2. We don’t know if they will reach that target by 2050 but we still see a €7 trillion ($11 trillion) opportunity. This is an area where money could be spent in areas such as renewables, energy efficiencies and charging stations for electric vehicles.”
Other themes in the fund included digital payments, digital enterprise, e-commerce and innovative health.
According to FE Analytics, within the Australian Core Strategies universe, the Munro Global Growth fund returned 37% over one year to 30 September versus returns of 3.6% by the global equity sector.
