Save Earth Fund CB SAVE EARTH FUND Quarterly update 31 December - - PowerPoint PPT Presentation
C B S A VE EA R T H F U ND Save Earth Fund CB SAVE EARTH FUND Quarterly update 31 December 2015 Fund performance* and AUM NAV, 31 December 2015 (EUR) EUR SEK Class RC 14.33 Q4 2015 +12.0% +9.8% Class IC 14.01 YTD 2015 +9.9% +6.7%
Q4 2015 +12.0% YTD 2015 +9.9% 5 yrs (annualised) +6.1% AUM (million) 20.70 Class RC 14.33 Class IC 14.01 Class ID 10.04
Fund performance* and AUM NAV, 31 December 2015 (EUR)
*Class RC
EUR SEK
+9.8% +6.7% +6.6% 190.1.
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C B S A V E E A R T H F U N D
energy, cleantech and water
Financial Supervisory Authority
management
administration is performed in Luxembourg
Carl Bernadotte
Portfolio Manager & owner >25 years’ experience Born 1955 Owns shares in CB Save Earth Fund
Marcus Grimfors
Portfolio Manager 7 years’ experience Born 1981 Owns shares in CB Save Earth Fund
Alexander Jansson
Portfolio Manager & CEO 7 years’ experience Born 1983 Owns shares in CB Save Earth Fund
Erik Allenius Somnell
Business Development 3 years’ experience Born 1984 Owns shares in CB Save Earth Fund
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C B S A V E E A R T H F U N D C B S A V E E A R T H F U N D Water Renewable energy Cleantech
Investment areas
Filtration Distribution Saving/efficiency Wastewater
Investment areas
Wind Solar Hydro Bio Geothermal
Investment areas
Energy storage Infrastructure Energy efficiency Material Recycling & Waste treatment Companies in area
Companies in area
Companies in area
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C B S A V E E A R T H F U N D
The Swedish private savings guru, Claes Hemberg, recommended CB Save Earth Fund as a Christmas gift for the
(N.B. in Swedish). Placera & Avanza, 11 & 14 Dec 2015 Despite the falling oil and gas prices, renewables had yet another record-breaking year in 2015. Bloomberg, 14 Jan 2016 The climate meeting in Paris, COP21, was widely regarded as a huge success. The Guardian, 14 Dec 2015 The incipient revolution for renewable energy has upended old business models: A Texas utility offers a nighttime special: free electricity. The New York Times, 8 Nov 2015
0% 1% 2% 3% 4% Sep-15 Oct-15 Nov-15 Dec-15 CB Save Earth Fund RC vs MSCI World Net 95 100 105 110 115 120 Sep-15 Oct-15 Nov-15 Dec-15 CB Save Earth Fund RC MSCI World Net
0% 1% 2% Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 CB Save Earth Fund RC vs MSCI World Net 95 100 105 110 115 120 125 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 CB Save Earth Fund RC MSCI World Net
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C B S A V E E A R T H F U N D
Source: MSCI, CB Fonder
from the three first quarters.
+9.9% +10.4% +12.0% +8.4% +3.3%
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25 50 75 100 125 150 175 200 225 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Water index (S&P Global Water) MSCI World Net CB Save Earth Fund RC Cleantech index (CTIUS) Renewable energy index (Wilderhill)
+89.5% +32.7% +100.8%
+43.3%
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C B S A V E E A R T H F U N D
WilderHill New Energy Global Innovation Index
S&P Global Water Index
The Cleantech Index
MSCI World
Source: MSCI, S&P, CB Fonder, Reuters, Bloomberg Daily data for the period 9 June 2008 – 31 December 2015
0.16 0.38 0.51 0.54 Renewable energy index (Wilderhill) Cleantech index (CTIUSTR) CB Save Earth Fund MSCI World Net Water index (S&P Global Water)
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than for two of the three sectors it invests in (Water index +9.7% p.a.; Cleantech index +3.8% p.a.; Renewable energy index -5.3% p.a.).
than the risk in MSCI World. The fund’s Sharpe ratio – the risk-adjusted return – is 0.38, which is higher than for two of the three sectors the fund invests in.
Source: Bloomberg, Reuters, S&P, CB Fonder Daily data for the period 9 June 2008 – 31 December 2015 (EUR).
C B S A V E E A R T H F U N D
0% 2% 4% 6% 8% 10% 12% 0% 5% 10% 15% 20% 25% 30% Return p.a. Standard Deviation CB Save Earth Fund MSCI World Net Cleantech index (CTIUS) Water index (S&P Global Water) Renewable energy index (Wilderhill)
0% 2% 4% 6% 8% 0% 5% 10% 15% 20% 25% 30% CB Save Earth Fund Handelsbanken Hållb. Energi DNB Renewable Energy BlackRock New Energy Nordea Klimatfond SAM Sustainable Climate Allianz Global EcoTrends Schroder Gl. Climate Change Parvest Global Env. C C RobecoSAM Sust. Water Fund Pictet - Water CB Save Earth Fund
0.06 0.07 0.13 0.28 0.31 0.36 0.38 0.39 BlackRock New Energy Allianz Global EcoTrends DNB Renewable Energy SAM Sustainable Climate Nordea Klimatfond Handelsbanken Hållb. Energi Schroder Gl. Climate Change Parvest Global Env. C C RobecoSAM Sust. Water Fund CB Save Earth Fund Pictet - Water
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characterised by high risk. The fund has, since inception in 2008, had a significantly lower risk than peers while delivering a highly competitive return; a combination that results in a high Sharpe ratio.
Nevertheless, the fund has a competitive Sharpe ratio also compared to the water funds.
Standard deviation Return p.a.
C B S A V E E A R T H F U N D
Source: Bloomberg, CB Fonder Daily data for the period 9 June 2008 – 31 December 2015 (EUR).
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Source: FactSet, CB Fonder
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C B S A V E E A R T H F U N D
Exposure to large companies with a long and proven track record i.e. no mayflies. A mixture
high- yielding utilities and growth companies.
Company Founded/ listed Country Sector Market cap € bn Share of AUM Geberit 1874/1999 Switzerland Water 11 5.0% Vestas Wind 1945/1998 Denmark Renewables 14 3.8% Nibe 1949/1997 Sweden Renewables 3 3.6% Andritz 1852/2001 Austria Renewables 5 3.6% Aalberts 1975/1987 Netherlands Water 3 3.6% Danaher 1969/1979 USA Water 56 3.5% Halma 1894/1972 UK Water 4 3.2% Idex Corp 1988/1989 USA Water 5 2.9% SunPower Corp 1985/2005 USA Renewables 3 2.8% Novozymes 2000/2000 Denmark Cleantech 13 2.7% Total/Average 12 34.6%
0% 20% 40% 60% 80% 100% Asia Europe North America RoW Cash*
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Source: CB Fonder *Including cash in underlying funds
C B S A V E E A R T H F U N D
As of 31 December 2015 As of 31 December 2015 0% 20%
40% 60% 80% 100% Renewable energy Cleantech Water Cash* 13% 35% 45% 7% Renewable energy Cleantech Water Cash*
11% 54% 28% 0% 7% Asia Europe North America RoW Cash*
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Source: Geberit, Berenberg, CB Fonder
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C B S A V E E A R T H F U N D
Europe (that accounts for >90% of sales). Known in the Nordics under the brands IDO and Ifö.
European construction market.
Organic growth, YoY
Source: Berenberg, CB Fonder
Geberit, organic growth
Sales by market/region
1. Germany (36.5%) 2. Switzerland (12.9%) 3. Benelux (7.7%) 4. Italy (7.4%) 5. Central/Eastern Europe (7.0%) 6. Austria (6.4%) 7. Nordics (4.8%) 8. France (4.2%) 9. UK/Ireland (3.6%) 10. Iberian peninsula (0.7%) 11. America (3.5%) 12. Far East/Pacific (3.2%) 13. Middle East/Africa (2.1%) Medium term target: +4-6 % Average since 2000: +5.2 %
Source: Geberit, CB Fonder Index 2009 = 100
Construction output and Geberit sales in Europe 2010-2014
Geberit sales currency-adjusted in Europe Total building construction Total building renovation Total new building
Source: Geberit, CB Fonder
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Source: Vestas, Kepler Cheuvreux, Nordea Markets, CB Fonder
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C B S A V E E A R T H F U N D
company back on its feet.
and other recurring business.
Source: Vestas, CB Fonder
Services growing – a clear sign of a maturing sector Market shares 2014 (onshore and offshore), %
Vestas 12,3% Siemens 9,9% GE 9,1% Goldwind 9,0% Enercon 7,8% Suzlon Group 5,8% United Power 5,1% Gamesa 4,7% Mingyang 4,4% Envision 3,8% Other 28,1% Source: Nordea Markets, Kepler Cheuvreux
EBIT-split 2015E High margins in service Installed wind capacity – cumulative and YoY More sustainable growth rates – a sign of maturity
Source: Kepler Cheuvreux
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Source: Novozymes, Berenberg, Kepler Cheuvreux, CB Fonder
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C B S A V E E A R T H F U N D
and water consumption – but mainly through their products, which in 2014 are estimated to have reduced their customers’ carbon emissions at a level equivalent to the emissions from 25 million cars.
environment: average organic growth has been 7% since 2008.
Global market leader in industrial enzymes
Source: Kepler Cheuvreux
Resource consumption ”decoupled” from economic growth – large focus on sustainability
Source: Novozymes
High organic growth
Novozymes, organic growth
Source: Berenberg, CB Fonder
0,2 0,4 0,6 0,8 1,0 1,2 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 0% 5% 10% 15% 20% 25% 30% Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 MSCI World CB Save Earth Fund RC
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Source: MSCI, CB Fonder *36 months data on a 60-day rolling basis (EUR).
16.9% 11.2% +0.44
C B S A V E E A R T H F U N D
The fund’s beta is consistently below 1 The fund’s standard deviation is consistently lower/in line with that
the benchmark index, MSCI World. This becomes particularly evident when the risk in the market is rising.
50 75 100 125 150 175 200 225 MSCI World Net Source: MSCI, CB Fonder *Data since fund inception in June 2008
The fund compared to MSCI World Net during the largest drawdowns (EUR)
believe that the fund’s performance in drawdowns proves that.
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1 2 3 4 5 6
C B S A V E E A R T H F U N D
The fund has
benchmark also during the recent drawdown: +2.1%
sector has performed better, why the prospects for active allocation are good.
2008 and 2010-2012 were lousy. In stark contrast stands the water sector which over the last 10 years has performed better or in line with the world index, which is why we argue that the sector provides a good base in our portfolio, whereas renewable energy (and cleantech) serves as satellites/complements.
see this as a sign of maturity for the environmental sector.
Source: Reuters, Bloomberg, S&P, MSCI, CB Fonder. Data per 2015-12-31
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The renewable energy and cleantech sectors have come to perform more in line with the world index – a sign of maturity.
C B S A V E E A R T H F U N D
60 70 80 90 100 110 120 130 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 CB Save Earth Fund RC World Energy
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been followed by significant underperformance in the environmental sector in general and in the renewable energy sector in particular – but this time is somewhat different.
environmental sectors against MSCI World Net during these periods. During each drawdown, the sector has underperformed against the world index, but this time the renewable energy sector has seen its best relative performance, despite the oil price drawdown being the second largest. We see that as a sign of a more mature industry less affected by external shocks. The water sector has performed best of the three sectors during each of the four drawdowns.
The fund has performed substantially better than the index (oil/gas companies) and can be seen as a good hedge against weak performance from fossil fuel related companies (caused by low oil price, stranded assets etc.).
The table shows the four largest drawdowns in the oil price (in USD) over the last decade, and the performance of each environmental sector relative to the MSCI World Net index during the same period.
Source: MSCI, CB Fonder
The fund has offered a good hedge against the falling oil price (EUR)
+13%
C B S A V E E A R T H F U N D
Source: MSCI, S&P, Reuters, Bloomberg, CB Fonder
Oil price Renewables Cleantech Water
0%
4%
3%
Relative performance vs. MSCI World
Period
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C B S A V E E A R T H F U N D
A more consolidated market – market shares for the 5 largest Chinese module makers 2009-2015E …leads to better margins for the producers, despite falling prices on solar panels.
2015; the entry barriers rise due to economies of scale and the producers become price makers (from being price takers).
in Q4 2012; in Q2 2015 it had risen to more than 20%.
Source: Bernstein Research, CB Fonder Source: Bernstein Research, CB Fonder Source: Bernstein Research, CB Fonder
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C B S A V E E A R T H F U N D
Source: Bernstein Research, CB Fonder
The price of solar energy (real, in $/MMBTU) has fallen sharply during the last years
figure illustrates the price development of the five different types of energy: Natural gas ("Henry Hub"), coal ("US Bitumous Coal"),
("Brent"), liquefied natural gas ("LNG") and solar energy ("solar").
years fallen sharply and is now a competitive alternative to
more established forms of energy.
energy market is becoming technology-based, which implies that higher demand gives lower prices (comp. Moore’s law). A new world order...
curves, which implies exponential rather than linear growth. When the new technology reaches 10% market share it’s game
the new technology substitutes the old one.
small fraction of the global energy market (1.6%), but the proportion has increased 8x in 10 years. What is interesting is that solar and wind today represents more than 20% of the new capacity installed globally. Renewable energy is still marginal, but it begins to have a significant impact on the margin.
Solar and wind, percentage of the global energy market Adoption curves for colour TVs
% Source: Technology Futures, Inc Source: Bernstein Research, CB Fonder Source: Bernstein Research, CB Fonder
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C B S A V E E A R T H F U N D
Source: Bernstein Research, CB Fonder Source: IEA, EIA, Citi Research
Eras of energy production: history speaks for substitution
and less accessible, while new technologies become cheaper and more easily available - hence a “waterfall development".
the technologies of coming decades, as little did we know about solar energy a couple of decades ago.
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C B S A V E E A R T H F U N D
Small Medium Big Huge
Low Medium High
Unknown unknowns (black swans etc.) Hard landing in Brazil, China and Russia Brexit A strong USD and/or prematurely interest rate hikes (compare 1937) suppresses the U.S economy. Geopolitics: Russia, Japan/China, North Korea, IS etc. Grexit
1 2 3 4 6 7 8 9 5
Continued low electricity and oil prices Rising interest rates
Risks that may pose a bigger threat to the environmental sector
The expectations in the market cannot be met; low oil price, a weak euro and expansionary fiscal and monetary policy is not enough – what then?
1 2 3 5 6 7 4 8 9
0.06 0.07 0.13 0.28 0.31 0.36 0.38 0.39 BlackRock New Energy Allianz Global EcoTrends DNB Renewable Energy SAM Sustainable Climate Nordea Klimatfond Handelsbanken Hållb. Energi Schroder Gl. Climate Change Parvest Global Env. C C RobecoSAM Sust. Water Fund CB Save Earth Fund Pictet - Water
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Source: Bloomberg, CB Fonder Daily data for the period 9 June 2008 – 31 December 2015 (EUR).
C B S A V E E A R T H F U N D
better ability to preserve capital in drawdowns compared to both peers and benchmark, MSCI World Net.
fossil energy (stranded assets).
growth companies.
to 6% of the NAV each year (ex date: 31 October).
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CB Save Earth Fund, RC
CB Save Earth Fund, IC
High-Water Mark; the share class is 9% below HWM as of 31 December 2015
CB Save Earth Fund, ID
High-Water Mark; the share class is 8% below HWM as of 31 December 2015
C B S A V E E A R T H F U N D
CB Save Earth Fund
CB Asset Management AB
Luxembourg
SEB Fund Services / SEB SA, Luxembourg
PricewaterhouseCoopers S.ár.I.
Yes
EUR
Daily/Daily
RC: No/No, IC: No/No, ID: No/Yes*
9 June 2008
RC: None, IC/ID: €500 000
RC: LU0354788688 / CBSVERC LX IC: LU0354788506 / CBSICAE LX ID: LU1053083884 / CBIDLUX LX
*Max 1%, dependent on client relationship
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C B S A V E E A R T H F U N D
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Issued by CB Asset Management AB. It is intended solely to provide certain information (the “Information”) about CB Save Earth Fund (the “Fund”). CB Asset Management AB has taken all reasonable care to ensure correctness and accuracy of the Information published in that Article, at the time of its publication. Share prices and values may increase or decrease and investments are always associated with a risk of
is what we to our knowledge believe are correct based on the information made available to us for the purpose of this document. No representation or warranty of any nature, express or implied, is made about its completeness, accuracy, reliability or suitability. Nothing contained in this document shall be deemed to constitute a financial, legal, tax or other advice of any kind and no information in this document shall constitute or deem to constitute a solicitation or an offer to purchase, or invest in, any financial products which are referred to on it. The offering of the shares of the Fund is restricted in many jurisdictions and must not be marketed or
with applicable exemptions for the private placement of collective investment schemes and other applicable jurisdictional rules and regulations. It is the responsibility of every recipient to inform themselves and observe applicable regulations and restrictions in their jurisdiction. Potential investors in the Fund should inform themselves of the applicable laws and regulations of the countries of their citizenship, residence or domicile and which might be relevant to the subscription, purchase, holding, conversion and redemption of shares in the Funds. Should you wish to obtain further information on the Fund, please consult our website, where the Prospectus, the latest available annual and semi-annual reports, and the Key Investor Information Document (KIID) of the Fund are provided.
C B S A V E E A R T H F U N D