Fund commentary

Aviva Investors Climate Transition Global Equity Fund

Month in review for July 2024

Max Burns

Fund Manager

Summary

Month in review

Global equities produced positive returns in aggregate in July on continuing hopes that global central banks were primed to cut interest rates. This was despite some disappointment at the end of the month that the US Federal Reserve decided to keep interest rates unchanged again. The fund produced a negative return and underperformed its benchmark index, primarily due to weak stock selection.

Looking ahead

We continue to position the fund conservatively, focusing on companies that meet our climate transition mandate and that possess resilient business models.

Key facts

Fund managers
Max Burns since 07/2021
Share class inception date
08/06/2020
Fund size (as at 30/08/2024)
GBP 733.7m
Benchmark
MSCI ACWI GR GBP

Fund overview

Objective: To grow your investment over and provide an average annual net return greater than the MSCI® All Country World Index over a 5-year rolling period by investing in shares of global companies responding to climate change by orientating their business models to be resilient in a warmer climate and a lower carbon economy; or providing solutions to mitigate climate change or help communities adapt to the adverse impacts of climate change.

Month in review

Global equities produced positive returns in aggregate in July on continuing hopes that global central banks were primed to cut interest rates. This was despite some disappointment at the end of the month that the US Federal Reserve decided to keep interest rates unchanged again. The market still expects the US to achieve a soft landing, but recent US economic data was weaker than expected, which has created nervousness among investors. Against this backdrop, the fund produced a negative return and underperformed its benchmark index, the MSCI ACWI. Stock selection was the primary cause of the fund’s weak returns, and was notably disadvantageous in the information technology and industrials sectors. Sector allocation had a favourable effect, however, largely due to the overweighting of industrials. At the stock level, the weakest performance came from technology-related companies Cadence Design Systems, ASM International and BE Semiconductor, as investors became nervous about the valuations of some of these stocks after strong year-to-date performance. On the positive side, the positions in Lonza Group and United Rentals performed well.

 

 

 

 

 

 

 

Performance

For the latest Monthly, Cumulative, and Annualised Fund performance data please refer to the PDF factsheet below.

Past performance is not a guide to future performance
Performance basis: Month end returns, Mid to mid, net income reinvested, net of ongoing charges and fees, in the share class currency and net of tax payable by the fund. The figures do not include the effect of any exit or entry charge.

The Fund's performance is measured against the MSCI® All Country World Index.

Looking ahead Last updated 31 July 2024

The combination of resilient growth, solid company earnings and inflation continuing to fall to within range of central-bank targets creates a positive backdrop for equities, even if valuations are starting to look a little rich following the breaching of new highs in a number of markets. Expectations for cuts in interest rates in the developed economies could well prove supportive, but sentiment may be hurt if these are pushed out or slowed further. We should also be mindful of the raised potential for unexpected geopolitical events to disrupt sentiment. 2024 has been an active election year in several key countries and results in the EU elections, in particular, have added to market uncertainty. A potentially contentious US election also lurks around the corner in November. Negative inflation shocks have the potential to sap confidence and it is by no means assured that the battle has been won. We continue to position the fund conservatively, focusing on companies that meet our climate transition mandate and that possess resilient business models.

Risks

Full information on risks applicable to the Fund are in the Prospectus and the Key Investor Information Document (KIID).

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Important information

THIS IS A MARKETING COMMUNICATION

The source for all performance, portfolio and fund breakdown data is Morningstar unless indicated otherwise. For share classes that have not yet completed 5 years, the cumulative performance chart will start from the first full month. All data is as at the date of the Factsheet, unless indicated otherwise.

Unless stated otherwise any opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as personalised advice of any nature. This document should not be taken as a recommendation or offer by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Portfolio holdings are subject to change at any time without notice and information about specific securities should not be construed as a recommendation to buy or sell any securities.

For further information please read the latest Key Investor Information Document and Supplementary Information Document. The Prospectus and the annual and interim reports are also available on request. Copies in English can be obtained, free of charge from Aviva Investors, PO Box 10410, Chelmsford CM99 2AY. You can also download copies at www.avivainvestors.com

Issued by Aviva Investors UK Fund Services Limited, the Authorised Fund Manager. Registered in England No. 1973412. Authorised and regulated by the Financial Conduct Authority. Firm Reference No. 119310. Registered address: 80 Fenchurch Street, London, EC3M 4AE. An Aviva company.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.