Investment

Chart of the Month – Green? Supergreen!

by Marie-Caroline Fonta

Green? Supergreen!

Notz Stucki Research

For the past three years, we generally haven’t gone a week without a mention of responsible investment. There is a real awareness of the situation in which we find ourselves, particularly from the point of view of climate change. We have to align our thoughts and our investments: from exclusion of companies to real impact, the range of sustainable investments is wide. Sustainable investments, either directly or through funds or ETFs, are expected to represent between $15 and $20 trillion of all assets under management over the next two to three decades. Since 2016, this approach has grown by 25% in Europe. In all industries, at corporate level, the notion of energy efficiency is increasing; all companies have to cut their carbon emissions. A large number of the world’s biggest companies have improved their energy consumption over the last five years. But there is still a long way to go!

Performance is also a very important factor when deciding to invest in this trend. We are now aware that sustainable investment is not detrimental to returns, and it has been shown that a company’s successful implementation of sustainability enhances its financial performance.

We did the exercise with a Clean Energy portfolio. A global dollar equity portfolio composed of 42 equally-weighted companies in Power, Energy Efficiency and Transport, (automotive, industrial, semiconductors, software, hardware, materials…).  We selected the most popular stocks and excluded extreme points from our analysis. Over the last 5 years, the portfolio’s performance is 112% vs 44% for the MSCI World. We clearly notice an outperformance and an explosion in the portfolio’s performance over the last 3 years.  The performance differential is mainly due to the stock selection and to the theme. The portfolio offers a dividend yield of 1.87% and is trading at 24.1x next year earnings  (PE: 19.1x for the MSCI World) with a correlation of 0.89 to its benchmark. On a YTD basis, the portfolio has demonstrated better resilience than the market.

Where do we stand at Notz Stucki? In Geneva, at corporate level, we launched in December 2017 our philanthropic initiative NS Impact, which supports local and concrete projects involving our employees. In the Asset Management department, we have gradually increased our exposure to sustainable funds in our three asset allocation funds. This ESG-SRI allocation represents between 14.4% and 24.6% of our current exposure, and was built up by investing directly in funds that focus on this specific theme or by switching to sustainable class of the funds we hold if the latter perform better. For our Long Only equity funds, we are in the process of integrating ESG analysis and rating in our stock selection process and are already compliant with the Norges Bank’s exclusion list. From traditional investing to philanthropy, the scope is huge, but taking a few steps in this direction seems to be standard in finance nowadays.

As Korben Dallas asked Ruby Rhod in the 1997 film the 5th element “Green?”, “Supergreen!.”

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Antonio Mira
CHIEF FINANCIAL OFFICER, MEMBER OF THE EXECUTIVE COMMITTEE

Antonio Mira joined NS Partners in 2006 as Group Chief Financial Officer. He heads the corporate functions and is involved in coordinating and implementing the decisions of the Executive Committee.
An experienced bank auditor, Antonio started his career in 1995 with Arthur Andersen, where he worked for some 7 years before joining Ernst & Young in 2002 as a Senior Manager.
Antonio is a Swiss chartered accountant and a Business graduate of Lausanne University (HEC).

Sébastien Poiret
DEPUTY HEAD OF WEALTH MANAGEMENT

Sébastien Poiret joined NS Partners in 2008 and manages funds of hedge funds and private client mandates. He also oversees the development of the Group’s offices in Mauritius.

Prior to joining NS Partners, he served as a Trader, Head of Manager research and Portfolio Manager in the USA and Switzerland for a single hedge fund (1998-2004) and for Optimal (2004-2008), Grupo Santander’s fund-of-hedge funds operations.

Sébastien holds a Bachelor’s degree in Corporate Finance from the ESPEME Business School (EDHEC Group) and an MBA in Finance and Economics from the Institute of Business Administration, both in Nice.

Abir Oreibi
BOARD DIRECTOR

Abir Oreibi joined the Board of the NS Partners Group in 2018, where she brings her truly international perspective and rich experience.
Among many other ventures, Abir set up Alibaba.com’s first European office. After living and working in Shanghai, Hong Kong, Bangkok and London, she now lives in Geneva, where she is CEO of Lift Events, an organization that identifies technology trends, their business and social impact through the organization of events and open innovation programs. Issues related to the challenges and opportunities created by new technologies as well as the strategic responses from organizations are at the heart of Lift’s activities.
Abir holds a BA in Political Sciences from the University of Geneva. She is an investor, and member of advisory and innovation boards.

Romain Pidoux, CAIA

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Romain Pidoux joined NS Partners in 2011 and heads the Group’s Risk Management.
He started his financial career in 2005 as Head of Quantitative Analysis for a Swiss Family Office, selecting funds and managing portfolio allocation. In 2008, he switched to the alternative world and joined Peak Partners as hedge funds analyst.
He is a Chartered Alternative Investment Analyst (CAIA) and holds a Master’s degree in international relations from the Graduate Institute of International Studies at Geneva University.

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