Guinness Sustainable Energy UCITS ETF
The Guinness Sustainable Energy strategy is managed for capital growth and invests in companies involved in the generation, storage, efficiency and consumption of sustainable energy sources (such as solar, wind, hydro, geothermal, biofuels and biomass).
Overview
The Guinness Sustainable Energy strategy is managed for capital growth and invests in companies involved in the generation, storage, efficiency and consumption of sustainable energy sources (such as solar, wind, hydro, geothermal, biofuels and biomass).
We believe that over the next twenty years the sustainable energy sector will benefit from the combined effects of:
- Demand growth - The electrification of transportation and improved energy storage economics brings attractive long-term sustainable energy demand growth
- Improving Economics - Sustainable energy sources have become cost competitive with power from fossil fuels; we expect the cost of supply to continue to fall
- Public & Private Support - Both governments and companies are pursuing sustainable energy in order to achieve mandated carbon targets or to improve public perception
- Low current exposure - Poor profitability and need for subsidies has kept the weight of sustainable energy in global indices and broad global equity funds at a low level
Sustainability Theme - The sustainable energy sector offers ‘green’ credentials that some investors are targeting to help facilitate global de-carbonisation and to reduce carbon intensity of their portfolios
Investment Team
High quality funds are run by high quality people.
We are proud of our collegial culture, with teams across the business benefiting from each other’s expertise as they target long-term returns for investors.
2024 Investor Conferences
Bringing a range of expertise, the investment team will cover global equities, energy & the energy transition, how to understand China, and developments in the tax-advantaged space.
Register today at the link below for a rewarding half-day of investment ideas and expert opinion at locations around the UK.
How to Invest
We aim to make it simple to invest in our funds. All our funds are open to direct investment via an application form. They are widely available on investment platforms and are eligible for UK investors’ ISAs and SIPPs.
Investment Case
The Guinness Sustainable Energy strategy is positioned to benefit from the many opportunities associated with the sustainable energy transition. We identify four sub-sectors and have assembled a proprietary investment universe of around 250 companies with critical mass that are most directly exposed to them:
- Displacement: displacement or more efficient usage of hydrocarbon-based energy
- Electrification: the switching of hydrocarbon-based fuel demand towards electricity, especially for electric vehicles
- Installation: the manufacture of equipment for the generation and consumption of sustainable energy
- Generation: the production of sustainable energy, either pureplay companies or those transitioning from hydrocarbon-based fuels
We do not limit ourselves to ‘pure plays’, opening our universe up to some companies with existing hydrocarbon-based fuel exposure, but this must be allied with a commitment to transitioning their business models towards sustainable energy sources.
We conduct rigorous independent analysis of the fundamental drivers of sustainable energy markets: energy commodity prices; sustainable energy technology research and development; installation and equipment prices; political and economic support for the sector; government and private sector demand. This allows us to form a top-down view, which in turn informs our industry energy sub-sector allocation.
The team operates a disciplined stock screening process. We review our investment universe each week to identify companies which look attractive on return on investment, valuation, earnings sentiment and price momentum. We also use sub-sector specific screens. Ideas generated by screening are then subjected to due diligence centred around detailed financial modelling.
The portfolio comprises around 33 broadly equally weighted positions. This portfolio construction is designed to create a balance between maintaining fund concentration and managing stock-specific risk, and there is no reference to the benchmark. The portfolio is liquid, with 90% of the Fund normally invested in companies with a market capitalisation over US $500 million.
Why invest in the Guinness Sustainable Energy UCITS ETF?
Concentrated Exposure
The Guinness Sustainable Energy Fund aims to deliver investment returns via concentrated exposure to 33 sustainable energy companies with an equal-weight approach; available in a daily traded UCITS structure.
Specialist Team
The Guinness Energy Team has 20 years of experience of running energy investment strategies in a consistent manner and providing insight for investors into the energy markets.
Investment Process
The Fund is run using a Top Down and Bottom Up investment process based on an internally created Universe of 250 Sustainable Energy companies with detailed valuation models.
Valuation Opportunity
The fund selects the most attractive equities in the universe. The portfolio displays growth characteristics together with higher return on capital, lower valuation multiple and stronger balance sheets than the MSCI World Index.
Sustainability Theme
The strategy invests in companies playing a key role in global decarbonisation, providing a vehicle for investors to align their capital with this positive impact.
Investment process
We conduct rigorous independent analysis of the fundamental drivers of sustainable energy markets: energy commodity prices; sustainable energy technology research and development; installation and equipment prices; political and economic support for the sector; government and private sector demand. This allows us to analyse likely demand for sustainable energy equipment and services and creates our top-down view, which in turn informs our industry energy sub-sector allocation. Analysis of the key drivers of growth, scarcity, barriers to entry and economics informs our weighting to our internally generated Sustainable Energy subsectors.
Bottom-up stock screening
The team operates a disciplined stock screening process. We review a universe of around 179 sustainable energy stocks each week to identify companies which look attractive on their return on investment, valuation, earnings sentiment and price momentum. Other sub-sector specific screens are also employed to generate ideas.
Stock due diligence
Stock ideas are taken from our screens. We then conduct due diligence to establish whether we have conviction to include the stock in our portfolio. The due diligence centres around detailed financial modelling.
Portfolio construction
Equal-weight approach
The portfolio comprises around 30 broadly equally weighted positions. Our equal-weight portfolio construction approach is designed to create a balance between maintaining fund concentration and managing stock-specific risk. It also imposes a structural sell discipline: an existing position must be sold to purchase a new holding.
Sector weights
There is no benchmark adherence in the Fund’s sub-sector weights.
Portfolio Risk Controls
Stock specific risk
Stock specific risk in the sustainable energy sector tends to be higher than the broader market. By constructing the fund of 30 broadly equally weighted positions, we avoid significant exposure to any one individual stock.
Liquidity
The portfolio is liquid, with 90% of the Fund normally invested in companies with a market capitalisation over US $500 million.
Currency
The Fund is not hedged from a currency perspective.
Fund Facts
The Guinness Sustainable Energy UCITS ETF was previously named the iClima Global Decarbonisation Enablers UCITS ETF. On 25/07 the Fund was renamed and the investment objective and policy of the Fund changed to reflect that the Fund will be actively managed.
Will Riley
Share Classes
For full information on the share classes available for investment please refer to the Key Investor Information document.
Listings & Codes
| EXCHANGE | TICKER | RIC | SEDOL | CCY | LISTING DATE |
|---|---|---|---|---|---|
| LSE | CLMA LN | CLMA.L | BLF0M50 | $ | 08/12/2020 |
| LSE | CLMA LN | CLMA.L | BLF0M83 | £ | 08/12/2020 |
| Xetra | ECLM GY | ECLM.DE | BN93X89 | € | 11/12/2020 |
| Borsa Italiana | CLMA IM | CLMA.MI | BN93X78 | € | 11/12/2020 |
| SIX | CLMA SE | CLMA.S | BMC7PD0 | ₣ | 25/03/2021 |
| BMV | CLMAN MF | - | BMZQDM9 | MX$ | 15/03/2022 |
| Euronext Paris | CLMA FP | CLMP.PA | BN472V2 | € | 09/12/2021 |