| Monthly comment for April |
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2010-05-05
Market concern about the huge budget deficit in Greece (13.6% of GDP in 2009) and the high public debt (113% of GDP in 2009) accelerated during the month and the country's borrowing costs soared. Some parallels are now drawn to the Asian crisis of 1997-1998 when a devaluation of the Baht in the relatively small economy of Thailand (Greece only represents 2-3% of total EU GDP) spread to South Korea - at that time a fundamentally healthy economy - and finally hit Russia in 1998 with serious consequences. The big difference between the two crises is that the one that hit Asia was a currency crisis while the one we are seeing in Europe is a debt crises. The Fund's exposure to Europe is currently about 32%.
The fund generated a return of 1.63% during the month. The water sector contributed most to the rise while renewable energy continued to underperform the World index. The fund remains underweight renewable energy with a total exposure of about 49% while the total exposure to the water sector amounts to about 32%. Vestas (wind-turbine manufacturer) and REC (solar-cell manufacturer) reported their results for the first quarter during the month. Vestas did not meet market expectations. REC came in above expectations but delivered an ambiguous and somewhat negative view of the second quarter and second half of 2010. We see the reaffirming of the full year guidance from Vestas as a major positive - if they reach the guidance the share is today trading at about 14 times expected 2010 earnings which is cheap, both historically and relative the industry average. Vestas announced during the month its largest order ever of 1.5 to 2.1 GW. In April Vestas gained 13.52% while REC lost 7.29%, both in local currencies.
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The fund in short
Save Earth Fund invests in renewable energy, environmental technology and water management through actively managed funds, ETFs and stocks. The fund is the only of its kind in Sweden. Our aim is to generate a return that clearly exceeds that of the MSCI World index, with a lower than the average risk of environmental funds. No minimum investment. The management fee is 1%. Daily subscriptions/redemptions. Mr Carl Bernadotte, Mr Alexander Jansson and Mr Marcus Grimfors are responsible for managing the fund. Learn more about our managers here. |