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Impax Environmental Markets shrugs off lack of a Tesla as sustainable interest soars

IEM issued £121mln worth of new shares over the period to meet strong demand from investors

solar power

Impax Environmental Markets PLC (LON:IEM), the sustainability-focused investment trust, said not having a stake in Tesla affected its relative performance over the past six months.

The electric-car pioneer accounts for 11% of the FTSE Environmental 100 Index and jumped in value by 2.5 times (150%) over the half-year to June.

Not having any stake in the carmaker meant IEM trailed the FTSE ET by 20% but it did better against its global comparator, the MSCI ACWI (-2.1%) even though a small/medium cap focus meant it was hit disproportionately hard by the volatility at the height of the coronavirus pandemic in April.

Net asset value at end June was 310.9p against 321.8p at the end of December.

Total assets rose to £757mln from £657mln as IEM issued £121mln worth of new shares over the period to meet strong demand from investors.

In the group's half-year report, chairman John Scott said that while it was too early to see what the post-coronavirus (COVID-19) landscape will be like, there are clear signs that concerns about environmental issues have been elevated.

IEM noted that renewable energy holdings were strong drivers of performance in the half-year, especially EDP Renovaveis (Renewable Energy Developer & IPP, Portugal), Xinyi Solar (Solar Energy Generation Equipment, Hong Kong) and SolarEdge (Solar Energy Generation Equipment, US). The holdings in energy efficiency specialists also did well.

On the downside, sectors with cyclical exposure to locked-down industries were weak, especially those with exposure to automotive markets, IEM said.

Going forward, IEM said COVID-19 had focused attention on 'tail risks' to which societies are exposed, with climate change being the most prominent. This will generate tailwinds for the company's investments in renewable energy and energy efficiency.

IEM said it is looking at several other themes going forward including social distancing and focus on 'resilience' to drive automation and digitisation; fragmenting supply chains and changes to food production and distribution alongside an increasing focus on health and wellbeing.

A first interim dividend of 1.3p has been recommended.

Quick facts: Impax Asset Management

Price: 507.375 GBX

AIM:IPX
Market: AIM
Market Cap: £661.69 m
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