Sustainability pays off again

18.04.2023

Sustainability pays off again

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Author - Andrea Otta

Sustainable stock investments are gaining momentum again. After a mixed year in 2022, the MSCI World Socially Responsible Investment Index (MSCI World SRI) has performed better than the conventional MSCI World Index since the beginning of this year. This trend has been observed in previous years as well. Was last year just a short interruption in the long-term observable steady outperformance?

We believe this could indeed be the case, for several reasons. One is the development of interest rates. In the summer of this year, the US is expected to reach its interest rate peak, followed by Europe in the fall - according to current market expectations. This is good news for growth stocks. Last year, these stocks suffered much more from rising interest rates, which led to their profit expectations being subjected to stronger discounting. The outlook for an imminent end to the interest rate hiking cycle has clearly improved the economic conditions here. The MSCI World SRI has historically shown a higher correlation with the MSCI Growth Index than with the MSCI Value Index.

 

 

On the other hand, the renewed focus on fossil energy stocks that occurred last year in the wake of the Russian invasion of Ukraine does not seem to be repeating itself in 2023. Since the beginning of the year, energy stocks, along with bank stocks, have had the worst performance among sectors.

Global mega-trends that are in line with sustainable investments are coming to the fore again, especially in the United States. One example is carbon-neutral transportation. The Biden administration is on track to drastically tighten emission rules for new cars in order to promote the expansion of e-mobility, and according to an analysis by the non-profit interest group Climate Power, companies announced in the first six months since the climate protection law came into force that they intend to create more than 100,000 new jobs in the clean energy sector in the United States.

The experienced team at Kathrein has been pursuing a sustainable investment approach for more than ten years and has identified four global mega-trends: technology, urbanization, health, and resource scarcity. In addition, we rely on strict sustainability criteria and independent certifications.

Ten Kathrein funds have already been awarded the Austrian Ecolabel of the Austrian Federal Ministry for Climate Protection, Environment and Technology for sustainable financial products, including the Kathrein Sustainable Global Megatrends fund, for which we received the certificate personally from Federal Minister Leonore Gewessler last Friday.

Disclaimer

This document is a promotional communication and not an offer or recommendation to buy or sell any financial instrument and does not constitute a legal sales document.

When investing in securities, price fluctuations due to market changes are possible at any time.

The published current prospectus or the information for investors pursuant to ┬ž 21 AIFMG as well as the basic information sheet of the fund are available on request from Kathrein Privatbank in paper form, as well as at www.kathrein.at under "Investment solutions / Our funds" in German.

There you will also find the link to the summary of investor rights. The management company may cancel the distribution of fund unit certificates outside the fund domicile country of Austria.

Fund notice

The fund currency of the fund is EUR.

Derivative instruments may not be used for the Kathrein Sustainable Global Megatrends.

Due to the composition of the fund or the management techniques used, the fund exhibits increased volatility, i.e. the unit values are exposed to large upward and downward fluctuations even within short periods of time, and capital losses cannot be ruled out.

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