DNB Asset Management S.A.

DNB Fund Renewable Energy - Monthly Update March 2023

Financial instability and high interest rates dominating financial markets
The fund and the sector underperformed the broader market in March as financial instability and high interest rates dominated financial markets. The top performer was Enel after delivering good full year results. The weakest performer was Sunrun: the collapse of Silicon Valley Bank has driven concern over availability and cost of debt financing. The top buys for the month were Sunrun and Darling Ingredients where we took advantage of weak share prices to significantly increase our bets. We funded these purchases by selling shares in Enel and First Solar, as well as (to a lesser extent) IMCD and Air Liquide – stocks that have outperformed year to date.
The EU has proposed the EU Green Deal Industrial Plan in response to the US Inflation Reduction Act (IRA) due to worries that the generous tax breaks offered in the US will reduce European competitiveness as a manufacturing hub for clean tech products. Through this, the EU aims to reduce bureaucracy, accelerate the roll out of net-zero projects, and “level the playing field”. The four pillars of this plan include: simplifying regulation, speeding up access to finance, developing skills for green industries and creating a more supportive environment for manufacturing. To address the first pillar, the EU is proposing a Net-Zero Industry Act (focusing on accelerating permitting and defining strategically important net-zero projects), which will be complemented by a Critical Raw Materials Act (focusing on achieving self-sufficiency).
In March, the IPCC published its summary of five years of reports (Synthesis Report of the Sixth Assessment (AR6)). The main takeaways are that “rapid and deep” emissions reductions are needed in “all sectors” of the economy over the next seven years to limit global warming to 1.5-2C. The report also finds that the “global economic benefit of limiting global warming to 2C exceeds the cost of mitigation in most of the assessed literature”. The next cycle of reporting is not expected until at least 2027, and this reporting therefore provides an important basis for understanding the climate crisis and efforts to mitigate its impacts for the next seven years. This highlights the need to invest in companies providing climate solutions.
Positive aggregated earnings revisions for the fund in March, while earnings multiples expanded. The fund remains at a premium valuation to the MSCI World, but we also have a stronger growth outlook.
Please find enclosed PDF for details.
You may also find our other fund reports via the links below. For any enquiries, we invite you to get in touch with your sales contact or to send an email to funds@dnb.no
Equity funds: 

  • DNB Fund Renewable Energy: SFDR Article 9 environmental & impact investing (Factsheet
  • DNB Fund Nordic Equities: Actively managed in a stable Nordic universe with a green tilt (Factsheet
  • DNB Nordic Small Cap: Actively managed in equities of small and medium capitalization size companies domiciled in the Nordic Markets (Factsheet)
  • DNB Fund Technology: Global value-oriented bottom-up technology fund (Factsheet
  • DNB Fund Future Waves: Article 9, Blue Economy, SDG investing (Factsheet
  • DNB Fund Disruptive Opportunities: Identifying disruptive trends in the future (Factsheet

Fixed income funds: 

  • DNB Fund Nordic Investment Grade: Pure Nordic corporate investment grade bond fund (Factsheet
  • DNB Fund High Yield: Pure Nordic corporate bond fund with both exposure to investment grade & high yield (Factsheet)
  • DNB Fund Nordic Flexible Bonds: Pure Nordic corporate bond fund with both exposure to investment grade & high yield (Factsheet)

Michael Bächtiger | Senior Wholesale Manager, Switzerland
DNB Asset Management S.A. 
michael.baechtiger@dnb.no | +352 621 142 129
13, rue Goethe | 1637 Luxembourg | www.dnbam.com