As positivity towards Asia and emerging markets shows no signs of abating, and demand for sustainable energy rises, experts at Guinness Global Investors Annual Conference recently discussed the outlook and investment opportunities.

The appetite for sustainable energy is insatiable, driven by electrification, Will Riley, portfolio manager at Guinness Global Investors, highlighted at the conference, which this news service attended. And Asia is at the heart of this.

Rising power needs, the electrification of transport, and the pivot towards renewable energy, continues to drive demand. Riley believes that there are a lot of investment opportunities on the global and sustainable energy side.

He co-manages the Irish-domiciled Guinness Global Sustainable Energy fund which is up 39 per cent over a five-year period, driven by electrification, although 2023 and 2024 were tougher years.

Key sectors for electrification include transport, where electric vehicles replace internal combustion engines, and buildings.

Although US President Donald Trump has pulled out of the global Paris climate agreement, and is dismantling climate policies in the US, which has had a negative impact, Riley believes that the energy transition hasn’t stalled. “Solar goes from strength to strength and we will see a lot more in the future,” he said. He also expects demand for electric vehicles to keep growing. 

Riley highlighted China’s strong role in the renewable energy sector. While China still relies on fossil fuels, it produces more than 80 per cent of all solar photovoltaic panels, half of the world’s leading electric vehicles and a third of its wind power. Nuclear is also coming back, he added. 

The fund is designed to benefit from opportunities associated with the transition to a sustainable energy system. He believes that over the next 20 years the sustainable energy sector will benefit from the combined effects of strong growth demand and the improving economics of renewable energy supply. It will benefit from both public and private support for low carbon technologies. The fund invests at least 80 per cent in companies involved in sustainable energy or energy technology sectors. Top holdings include French electrical group Legrand which has expanded its product range in sustainable development with new products for electric vehicle charging/electric vehicles and data centres.

Holdings also include German tech multinational Siemens, Spanish wind-power specialist Iberdrola and Italian cable manufacturer Prysmian. Another top holding is French multinational Schneider Electric, a specialist in digital automation, and US electric power and energy infrastructure company NextEra Energy.

Asia
Like a number of wealth managers, Edmund Harriss, chief investment officer (CIO) at Guinness Global Investors (pictured), is positive about the outlook for Asian equities and highlighted at the conference investment opportunities in the region. He emphasised that new industries would power its next stage of growth, with Asia at the heart of the revolution in electrification of transport and artificial intelligence. It also benefits from an expanding pool of middle-income consumers, with higher incomes and spending capacity.

Harriss is co-manager of the Irish-domiciled Guinness Asian Equity Income fund which gives exposure to dividend-paying companies in the Asia Pacific region; it has outperformed the index. Top holdings include the China Medical System, Taiwan Semiconductor Manufacturing Co (TSMC), Taiwan’s electronic multinational Hon Hai Precision Industry, and the Industrial and Commercial Bank of China (ICBC). He is overweight in China and Taiwan and underweight in India and Korea.

A number of wealth managers are also positive about emerging markets in Asia this year which have been outperforming developed ones, such as California-headquartered investment manager Franklin Templeton as well as Paris-based Carmignac, Amundi and Indosuez. See more here and here.

Guinness Global Investors has a number of other funds, including the recently-launched Guinness Global Real Assets Fund and the Guinness European Equity Income Fund. See more here and here.