All information is at 29 February 2012 (unless otherwise stated) and unaudited.
DATA AND PERFORMANCE
Share price (pence)
Total fund size (NAV) ( m)
Market capitalisation (m)
Management fee (%)
22nd February 2002
Number of holdings (including unlisted)
Reuters RIC code
IEM Net Asset Value*
MSCI World Global Small Cap**
1 month %
3 months %
1 year %
3 year %
5 year %
7 year %
* Performance data incorporates undiluted NAV until exercise of warrants on 25 June 2010
** Total return
TOP TEN HOLDINGS
Ground source heat pumps
Hazardous waste treatment
Steam based energy efficiency
Meters and utility data
Air pollution control
US and Canada
Asia ex Japan
Environmental support services
Private and other
IMPAX ENVIRONMENTAL MARKETS plc
MANAGER'S COMMENTARY (February 2012)
Markets have remained buoyant since the start of the year, driven by renewed optimism regarding global growth, hopes of a permanent lull in the Eurozone crisis (especially following the ECB's LTRO), and signs of a positive turnaround in investor sentiment and risk appetite.
Performance Summary Cyclical stocks with construction/industrial/commodity price exposure and Asian stocks benefitting from continuing recovery drove performance. Lee & Man (paper recycling, Hong Kong) rose following continued economic growth in the region and due to price increases from competitor Nine Dragons. Stocks reporting strong Q4 earnings, such as Regal-Beloit (electric motors, US) and Kingspan (insulation products, Ireland) also performed well.
Underperformance came from selected companies issuing profit warnings and US stocks which lagged cheaper European/Asian names. EDP Renovaveis (renewable IPP, Spain) fell following a disappointing Q4 as weather conditions caused capacity to drop and led to subsequent downgrades in 2012 guidance. GLV (water treatment technology, Canada) experienced challenges in both its water and pulp paper businesses resulting in a profit warning. LKQ (automotive recycling, US) fell as a result of profit taking following strong Q4 results and anticipation of slower growth in 2012 guidance.
Policy Update Several governments, including Spain, UK, Greece, China and Germany lowered solar feed-in tariffs in February following strong solar installation figures and sharply lower module prices.
Although UK solar tariffs were lowered, the long-term solar installation target for 2020 was increased by more than ten-times to 22GW. The UK Energy and Climate Change Secretary Chris Huhne resigned and his replacement Ed Davey is expected to have a particular focus on energy efficiency with a dedicated Energy Efficiency Deployment Office (EEDO).
The European Union proposed new legislation to limit sulphur content in shipping fuels and to reduce sulphur emissions in some areas to 0.1% by 2015. The EU Parliament also voted to jump-start negotiations with the EU Council for a new Energy Efficiency Directive, which would make the 20% energy efficiency target by 2020 binding, commit the EU-27 countries to refurbishment of 2.5% of public buildings per year and oblige energy companies to find 1.5% energy savings every year.
In the US, the Department of Interior will propose tighter fracking standards on federal land including: disclosure of chemicals used in the process, demonstrations that wells are not leaking and checks to ensure the safety of drinking-water supplies. A new report published by Standard & Poor's also showed that previous failures to invest means the US public water system faces severe stress and that the investment amount now required is $335bn over the next two decades, more than double the 2002 estimate.
In Asia, China is to tighten environmental standards on lead acid batteries as well as increasing a resource tax on six minerals including iron ore. South Korea will roll out 10 million smart meters to roughly half of all households by 2016 to improve efficiency.
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