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Fund Manager Biography
Sophie Horsfall and Terry Coles are Fund Managers of the F&C Global Climate Opportunities Fund and between them boast in excess of 24 year's industry experience. Both hold the CFA qualification and have extensive knowledge within Global Equities.
Fund Manager
Sophie Horsfall / Terry Coles
Fund Manager Commentary
	Market review A return of risk aversion dictated the path of investment markets in the second quarter, which saw equity markets underperform bonds. Fears that a contagion of government debt default worries would paralyse the economies in the Eurozone periphery, combined with concerns surrounding the impact of a domestic property slowdown on China's growth prospects, led to all major equity markets losing ground. Despite the escalating government debt concerns, bond markets were a beneficiary of the slump in risk appetite and made gains over the quarter. Performance & Attribution The Fund underperformed its benchmark (MSCI World) index over the period amid a backdrop of extreme risk aversion and market volatility. Stock selection was the main driver of underperformance over the quarter. Monsanto and its ‘Round-up’ weed killer continues to face pricing pressure and agricultural equipment manufacturer AGCO, which has a large exposure to the Eurozone and Eastern Europe, also underperformed. The thematic nature of the Fund means an inherent overweight, relative to the MSCI, to certain industrial sectors, which underperformed in a more uncertain environment. On the plus side the Fund saw strong relative performance from the defensive attributes of electricity generator Tractebel Energia and generator and distributor AES Tiete in Brazil. Elsewhere, bicycle manufacturer Shimano benefited from a recovery in demand in both the US and Europe. Sector selection overall was also positive with the main driver the significant overweight in utilities. At the country level, Brazil was by far the strongest contributor to performance and overall the Fund benefited from positive regional allocation. Activity In terms of activity, we added eBay to the portfolio on the back a recovery in consumption trends. Japanese water and environmental management group Kurita Water was also added to the Fund based on the company’s high quality business model and attractive valuation. Elsewhere, SMA Solar was added to the portfolio due to its strong pricing power and the high barriers to entry within the inverter market. As regards sales, we took profits from our position in Vestas Wind Systems after the price spiked following the winning of a large order. Oest Elektrizitats was sold due to the difficult back-drop facing European power markets, while cable manufacturer Nexans was sold to reduce exposure to cyclical stocks, with this area of the market concerned over a possible slowing of growth in China. Outlook We are currently maintaining our significant exposure to sustainable mobility and energy efficiency themes, both of which should continue to benefit from a large part of the $450bn stimulus packages allocated by governments globally for climate related investment. Within alternative energy, we remain sceptical about the outlook for the vast majority of companies within the solar industry, given increased competition, impending feed-in-tariff cuts and a lack of visibility on 2011 demand. However, falling solar installation costs do benefit consumers and also companies that are able to hold margins steady while they enjoy higher volumes. The long-term fundamentals for the nine climate related investment themes remain positive, and are supported by the US and Chinese policy proposals which, in our opinion, should provide meaningful growth to companies providing technologies and solutions to reduce greenhouse gas emissions. (text dated:30/06/2010)

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