Growth driven by sustainability

Growth driven by sustainability
Growth driven by sustainability

Focus on the fund managed by Pauline Grange focused on companies that respect global challenges in terms of sustainability.

The ‘CT (Lux) Global Sustainable Outcomes Global Equity’ fund offers the opportunity to invest in high-value companies focused on finding solutions to global sustainability challenges.

“Over the past quarters, growth in the global economy has been significantly more robust than expected,” says Pauline Grange, international equity portfolio manager at Columbia Threadneedle Investments, and adds : “Towards the end of 2023, a better economic situation boosted performances in sectors of a rather cyclical nature such as industrial production and commodities, which led to price gains of the ‘CT (Lux) fund Sustainable Outcomes Global Equity’, which is overweight in both areas.”

This fund, which Pauline Grange is responsible for, aims to obtain a long-term increase in the value of the investments made there, by investing in companies whose products and services generate lasting positive results for the environment and Company. To this end, the fund invests at least 90% of its assets in shares issued by companies around the world, including companies located in emerging countries.

AI, health, raw materials: the flagship actions in the sights of CT (Lux) Sustainable Outcomes Global Equity

Stocks in the information technology sector are among the fund’s favored holdings. Pauline Grange early on bet on the growth potential of technology companies that have attracted market attention thanks to generative AI. Thus, investors contributing to the fund benefit from the stock of Nvidia, which occupies a long-term position in the fund ‘CT (Lux) Sustainable Outcomes Global Equity’ (CTSOGE). According to Bloomberg, when the computer giant drastically revised upwards its growth forecasts for its processors intended for artificial intelligence, analysts calculated that the company’s profits would climb by around 350%. Shares have improved by 239% in one year, until January 2024.

Among the structural themes that have pushed markets higher in recent quarters are molecules developed by Novo Nordisk and Eli Lily, which offer two new drugs intended to combat obesity. These two companies are part of the second largest sectoral element of the CTSOGE strategy: actions related to the health sector. “The enthusiasm for these drugs has even temporarily exceeded that for artificial intelligence. Investors quickly drew conclusions about the consequences of a slimmer global population, which would be particularly visible in the United States, where, according to American health authorities, 42% of the adult population is considered clinically overweight. important,” reports Pauline Grange, who adds: “For several of the positions we hold in the CTSOGE strategy, these structurally attractive investment themes have fueled stronger earnings growth than expected. This in fact increased by 26.5% last year, while the MSCI ACWI gained 22.8%.”

Renewable energies: hope for the entire planet, despite increasing social and ecological challenges

The ever-present theme of AI cannot hide the fact that social and ecological challenges have become more acute. It is clear that over the past three years, poverty has increased globally, aggravated by geopolitical conflicts and environmental disasters linked to climate change.

“And yet, there remains hope,” emphasizes Pauline Grange. “Due to the dual goals pursued by most countries in the world, namely energy security and decarbonization, renewable energy has seen an expansion of almost 50% in 2023, reaching a total production of around 510 gigawatts, which represents the highest growth rate in the last two decades.”

This development has been driven by solar energy to which we owe 75% of this growth. The power of renewable energies has thus reached a record level in Europe, the United States and Brazil. However, it is China that leads the pack: in 2023, the world’s second largest economy will have commissioned as many new solar power plants as the entire planet in 2022.

Against the backdrop of huge investments in renewable energy, the International Energy Agency (IEA) has revised upwards its overall renewable energy forecast for 2024 and beyond. Pauline Grange specifies on this subject: “The IEA predicts that nearly 3,700 gigawatts of new renewable energy capacity will power the network by 2028.”

Clean technologies: cautious optimism for the year 2024, despite some setbacks

Despite increasing investment, cleantech stocks had another disappointing year in 2023 as returns from the capital-intensive sector were hit by rising financing costs as inflation hit. materials and supply chain issues, particularly in offshore wind farm projects.

Given that in 2024, more than 50% of the world’s population will be called upon to participate in important elections, Pauline Grange is keen to closely monitor the changes taking place in the environmental policy of various governments, particularly to confront climate change. From this point of view, the presidential elections represent a major risk for the environmental policy of the United States. A victory for Trump’s Republicans could lead to the repeal of Biden’s anti-inflationary law as well as a withdrawal from the Paris climate agreement. Pauline Grange, however, does not allow herself to be destabilized: “The growing profitability of renewable energies which, according to the International Energy Agency, meant that 96% of new wind and solar power plants built last year cost less than existing ones. new conventional fossil fuel power plants, as well as the growing global consensus on moving away from fossil fuels, lead us to believe that a Trump election victory would not prevent the transition to sustainable energy systems, in a process that will require several decades, and which most policy makers now consider necessary.

Learn more about the CT (Lux) Sustainable Outcomes Global Equity IU USD fund (SICAV | ISIN: LU2282711105)

Important information

This is a marketing announcement. Please read the UCITS prospectus and the RIB before making a final investment decision.
The Fund is a sub-fund of Columbia Threadneedle (Lux) II, an open-ended investment company (“SICAV”) incorporated in Luxembourg and managed by Threadneedle Management Luxembourg SA The latest prospectus of the SICAV, the key information document for Investor (KIID) Key Information Document and Summary of Investor Rights are available in English and/or local languages ​​(if available) from the management company Threadneedle Management Luxembourg SA, International Financial Data Services (Luxembourg) SA, from your financial advisor, on our website www.columbiathreadneedle.ch and from our representative and paying agent in Switzerland, CACEIS Investor Services Bank SA, Esch-sur-Alzette, Zurich branch, Bleicherweg 7, CH-8027 Zurich. Threadneedle Management Luxembourg SA may decide to terminate the arrangements made for the marketing of the fund. The fund is classified as a fund promoting environmental or social characteristics in accordance with Article 9 of EU Regulation 2019/2088 on sustainability disclosures in the financial services sector (Disclosure Regulation). The decision to invest in the promoted fund must take into account all the characteristics or objectives of the promoted fund, as described in its prospectus.
Published by Threadneedle Management Luxembourg SA Registered with the Trade and Companies Register (Luxembourg), registered under number B 110242, 44, Rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg. Columbia Threadneedle Investments is the international brand name of the Columbia and Threadneedle group of companies.

Columbia Threadneedle Investments is the international brand name of the Columbia and Threadneedle group of companies.

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