Dick van Ommeren, Chair of the Management Board of Triodos Investment Management: “In the first half of 2022, Triodos Investment Management experienced a decline in assets under management, which didn’t happen for a long time. This is the result of a unique situation in which both stocks and bonds showed a decline in value due to respectively downward moving stock markets and rising capital rates. These developments, coupled with uncertainties caused by the horrific war in Ukraine, are clearly impacting investor sentiment. Investors are more reluctant to invest than usual, which is reflected broadly in the market in a more limited influx of new capital. Understandable but regrettable, because now more than ever it is important that we continue to invest in those projects and companies that make a positive contribution to our society.”
The aforementioned developments in the first half of the year have obviously affected all of Triodos Investment Management's funds, but their impact varies widely by sector and fund. While the funds that invest in listed companies and bonds experienced a decline in value and therefore a decline in assets under management, the fund with equity capital in renewable energy, for example, experienced an increase in value and growth in assets under management due to the continued rise in electricity prices. While the picture is as such varied, the funds with lower valuations dominated, leading to the decline in Triodos Investment Management's total assets under management.
Development Triodos investment funds in the first half of 2022
Triodos investment funds offer investors the opportunity to directly invest in sustainable sectors. These sectors range from inclusive finance, sustainable energy, organic food and agriculture, to listed companies that materially contribute to the transition toward a sustainable society.
In the first half of 2022, the assets under management of the Triodos Impact Equities and Bonds funds (Triodos SICAV l), which invest in listed equities and bonds, decreased by 12.0% to EUR 2,683.8 million. The assets under management in the discretionary portfolios of Triodos Bank Private Banking Netherlands, which are managed by Triodos Investment Management, decreased by 12.7% to EUR 787.9 million. The decrease in assets under management is the result of negative stock exchange movements. The funds experienced net inflow in the first half of 2022.
Triodos Food Transition Europe Fund, the fund that offers investors the opportunity to participate in the growth of the organic and sustainable food sector in Europe, saw its assets under management grow by 1.3% to EUR 73.3 million.
The assets under management of Triodos Energy Transition Europe Fund, the fund that invests in companies that generate renewable energy, improve energy efficiency and/or offer energy flexibility, grew by 5.9% to EUR 137.9 million.
The assets under management of Triodos Groenfonds, the fund that invests in green projects that promote sustainable development, decreased by 20.6% to EUR 943.8 million. The decrease is mainly explained by a combination of regular outflow from the fund and lower inflow of capital compared to other years due to investor uncertainty in relation to geopolitical and macroeconomic developments, as well as the negative performance of the fund as a result of the rise in capital market interest rates.
Triodos Emerging Markets Renewable Energy Fund, the fund that invests in the much-needed energy transition in emerging markets by providing long-term senior debt to utility-scale wind, solar and run-of-the-river hydro projects and which was launched in October of last year, saw its assets under management grow by 33.7% to EUR 34.2 million.
Triodos Microfinance Fund grew by 10.1% to EUR 534,1 million and the assets under management of Triodos Fair Share Fund grew by 1.6% to EUR 387.4 million. Both funds invest in financial institutions in emerging markets and have a similar investment strategy but cater to different types of investors. Triodos Microfinance Fund is a fund for qualified and institutional investors whereas Triodos Fair Share Fund is a fund for Dutch private investors.
Triodos Multi Impact Fund, the Triodos fund-of-funds, increased its assets under management by 6.8% to EUR 32.0 million. The assets under management of the SFRE Fund, the first global open-ended investment fund created to deploy long-term and mission aligned capital to values-based banks, decreased by 6.8% to USD 40.3 million.
In the first half of 2022, Triodos Investment Management launched Triodos Future Generations Fund, a fund focused on improving the well-being and development of children worldwide. The fund closed the first half of 2022 with EUR 29.1 million assets under management.
Returns
Based on net asset value, the performance as per the last trading date of June 2022 was:
Fonds | 1-year | 3-year | 5-year |
Triodos Groenfonds1 | -9.4% | -2.4% | -0.7% |
Triodos Fair Share Fund2 | 7.6% | 2.7% | 2.8% |
Triodos Microfinance Fund (I-cap share class) | 9.2% | 3.4% | 3.3% |
Triodos Food Transition Europe Fund (Q-dis share class) | -1.2% | 6.2% | 1.9% |
Triodos Energy Transition Europe Fund (Z1-cap share class)3 | 16.8% | 7.7% | 7.0% |
Triodos Global Equities Impact Fund (Z-dis share class)2 | -10.5% | 4.1% | 5.6% |
Triodos Impact Mixed Fund - Neutral (Z-dis share class)2 | -11.9% | -0.3% | 1.7% |
Triodos Impact Mixed Fund - Defensive (Z-dis share class)4 | -12.7% | -2.6% |
|
Triodos Impact Mixed Fund - Offensive (Z-dis share class)4 | -10.7% | 1.9% |
|
Triodos Pioneer Impact Fund (Z-cap share class)2 | -17.5% | 6.4% | 6.0% |
Triodos Euro Bond Impact Fund (Z-dis share class)2 | -13.7% | -5.0% | -2.0% |
Triodos Sterling Bond Impact Fund (KR-dis share class)5 | -8.6% |
|
|
Triodos Multi Impact Fund (Z-dis share class) | -3.4% | 0.2% | 0.5% |
SFRE Fund (A-USD share class) | 0.7% | 1.0% | -0.4% |
1 Return including reinvestment of dividends, excluding potential fiscal benefit for investors.
2 Return including reinvestment of dividends.
3 Return including reinvestment of realised gains.
4 This fund was launched in May 2019. The 5-year return is therefore not available. Return including reinvestment of dividends.
5 This fund was launched in October 2020. The 3-year and 5-year returns are therefore not available. Return including reinvestment of dividends.
The returns of Triodos Investment Management’s funds show a mixed picture. The returns of fixed-income funds such as Triodos Groenfonds, Triodos Euro Bond Impact Fund and Triodos Sterling Bond Impact Fund were under pressure as capital market interest rates rose for the first time in years. The returns of the funds that invest in listed companies were negatively influenced by the downward trend on the stock markets in the first half of the year as a result of, among other things, the war in Ukraine. Triodos Energy Transition Europe Fund, on the other hand, saw the continued rise in electricity prices being translated into fund-level returns. Funds investing in financial inclusion in emerging markets also delivered good returns through solid and well-diversified underlying portfolios, despite challenging geopolitical and economic developments.
More detailed information on the financial performance of the above-mentioned funds is available through the fund’s semi-annual reports, which will be published on 31 August 2022 via www.triodos-im.com.