Global Climate Opportunities 3Q24 Commentary

October 18, 2024

Investor Letters

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Global equity markets had a solid third quarter of 2024. The rally was broad-based with small and mid-caps performing well alongside non-US equities. The U.S. Federal Reserve cut interest rates by 50 basis points and signaled that further reductions are expected in 2025, given current trends in the labor market and consumer confidence. Oil prices declined ~16%, providing a much-needed disinflationary tailwind, while gold continued its strong YTD rally. In European markets, both the European Central Bank and Bank of England implemented easing cycles. In Asia, China unveiled its largest fiscal stimulus program since 2015 to help its weak property sector, which included cuts to mortgage rates and removing home-buying restrictions.

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Climate-oriented equities had an impressive quarter and outperformed broad global indices, standing to benefit from the global easing cycle. As a result, some of the most interest-rate sensitive areas, including residential solar and offshore wind companies, exceeded expectations. Grid equipment companies have upheld their momentum, driven by healthy sales and earnings growth from data center-driven infrastructure spending. Laggards included hydrogen-focused companies, given worries on public policy and capital spending, and electric vehicle (EV) charging companies due to lackluster EV demand.

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Global Climate Opportunities 3Q24 Commentary

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Global Climate Opportunities 3Q24 Commentary

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