Newsletter
Environmental strategies

Q1 2026

Quarterly report of the fund management

2025 was a consistently good year for global equities – but it was also quite volatile. In the end, almost all indices were up, and almost all markets outperformed the US. In fact, we saw the strongest underperformance of the US relative to global indices since the 2009 financial crisis which is also related to the weakness of the US dollar. 

The stock market year was dominated by political decisions – above all tariffs and other radical political experiments which ultimately culminated in Liberation Day. However, it was left to the bond market to show the US President his limits.

Just one week later, he backtracked (keyword: TACO), and since then, global indices have only known one direction – upwards. Ultimately, strong corporate earnings growth prevailed, driven primarily by tech companies and one dominant theme: AI. Not only did the hyperscalers themselves benefit but the increased efficiency of "AI adopters" – companies that use AI to reduce costs (mostly employee costs) and thus increase margins – also caused euphoria. 

Many companies in our segment, whether producers of solar energy, battery storage or wind turbines, also benefited. Companies that provide the infrastructure for the expansion of data centres, especially networks and electronics within the data centre, also performed very well thanks to increased demand. The companies in our segment supply the "shovels" for the gold rush, so to speak. Note: Please note that an investment in securities entails risks in addition to the opportunities described.

Which AI model ultimately prevails will probably be irrelevant; the data centres are being built, and the electricity and grid connections are needed. In this respect, we can also look back on a very positive year for our funds, as they performed significantly better than broadly diversified equity indices, albeit with higher volatility, mainly from the US. 

Although the political jibes and comments from the White House are not going to diminish, the facts on the ground are clear and show rising electricity demand and a stable legal environment for renewable energies. We therefore remain optimistic and expect to catch up with the overall market and further close the valuation gap. 

Report for the fourth quarter of 2025

The fourth quarter was marked by the longest government shutdown in US history. During this period, the world's largest economy did not publish some economic data which left investors flying blind at times. This was compounded by further developments, announcements and reversals around tariffs. None of this prevented the markets from rallying. The impressive strength of corporate earnings pushed equities to new record highs – the MSCI World achieved this on 25 December while the S&P 500 followed suit on 26 December. 

The stock market is also experiencing an M&A and IPO boom. The volume of IPOs has increased by 47% compared to 2024, and the number of M&A deals worth >$10 billion has reached a new record high. 

The Fed has been supportive and remained accommodative with three interest rate cuts in 2025. Although inflation remains unchanged at ~3% and the US continues to record strong GDP growth, the Fed is currently focusing on the weaker labour market. In addition, political pressure on the Fed is increasing noticeably. For the first time since 2018, there were three dissenting votes on the December interest rate decision, and Jerome Powell's term expires in May 2026. The appointment of his successor will be interesting and set the course for the next few years. The current bias of the FED points to falling interest rates, which is fundamentally positive for equities in general, but especially for our segment. 

As always, there are many risks, but these are currently being shaken off by the market. We have seen this continue into the new year – the US has kidnapped the President of Venezuela, and the S&P 500 is trading just a few points below its all-time high...

The reporting season at a glance

The past reporting season in our segment once again delivered positive surprises. Of course, this does not apply across the board to all companies, but in the renewable energy sector, the picture has been increasingly positive over the last three quarters, which was ultimately reflected in higher share prices. However, there are significant differences within the sector. Issues such as grid expansion and suppliers in the grid sector continue to perform very well. The grid infrastructure in Europe and the US is outdated, which means that utility companies that normally operate very cautiously, are (have to) make enormous investments. Added to this is the rising demand for electricity which is largely covered by renewable energy. 

One positive example from the reporting season is HA Sustainable Infrastructure Capital (HASI). The company has been financing renewable energy projects for over 40 years and has recently increased its assets under management to $15 billion. HASI also works with private equity firms. Through a joint venture with KKR, it was recently able to invest in one of the largest renewable energy projects in the US – $1.2 billion for the 2.6 GW Sunzia megaproject in the New Mexico desert. This project also includes a nearly 900 km long high-voltage power line to Arizona. Thanks to its many years of experience, the company is a welcome partner for large-scale projects, and its valuation remains quite favourable: it is currently trading at a P/E ratio of 12 for next year and a dividend yield of ~5%. As can be seen in chart 1, assets under management grew at a compound annual growth rate (CAGR) of 17% while earnings per share grew at a CAGR of 12%. 

Note: The companies listed here have been selected as examples and do not constitute investment recommendations. Past performance is not a reliable indicator of future performance.

Chart 1: HASI's success story: assets under management at a record high, very strong earnings growth across all market phases Source: HA Sustainable Infrastructure Capital, press release, https://investors.hasi.com  

It is no coincidence that HASI is increasingly focusing on wind power. Recently, stocks in the wind sector, such as Vestas and Nordex, have been making a comeback. The onshore segment in particular continues to expand rapidly, both in Europe and in the US, where there is now greater clarity following the new legislative decisions. However, the situation is more difficult in the offshore segment which Trump has particularly targeted. Here, there are weekly attacks, and construction stops which are usually lifted by the courts after a short time, but nevertheless cause a great deal of uncertainty in the sector. In such an environment, it is necessary to remain selective – active management is particularly worthwhile here.

Hyperscalers and the hunger for energy

The extreme demand for electricity for hyperscaler data centres continues to be a key driver for our segment. Energy is the limiting factor, as comments by Saty Nadella (CEO of Microsoft) "The biggest issue we're having now isn't chips — it's POWER. The new bottleneck is electricity" and Elon Musk (CEO of Tesla), "AI will change everything – and it will require enormous amounts of energy". In essence, this means that without electricity, there can be no AI! 

But actions speak louder than words. In September, Meta (Facebook) announced that it wanted to enter the energy trading market. As one of the largest consumers of energy, it makes sense to position itself more actively in this market. Alphabet (Google) also caused a stir recently when it announced the acquisition of renewable energy developer Intersect for $4.75 billion in December. Intersect has already collaborated with Alphabet and specialises primarily in providing renewable energy for data centres. What is exciting about this is that the deal was primarily aimed at Intersect's development pipeline – i.e. additional future solar and wind farms that will be connected to the grid. This is a sign that investments in AI and data centres are increasing and that the race for access to electricity – keyword "speed to power" – is intensifying.

Nextracker becomes Nextpower

On 12 November 2025, Nextracker announced its rebranding to Nextpower, signalling its transformation from a leading provider of solar trackers to a global supplier of integrated energy technology solutions (see chart 2 and the accompanying news link to the company's case study).  

With the name change, Nextpower is positioning itself as a full-service company that aims to be involved in every step of the value chain for large solar projects and is expanding its share of a project's capital requirements from around 9% to 27%. Nextpower announced a revenue forecast for the 2027 financial year of $3.6 to $3.8 billion and a revenue target for the 2030 financial year of $4.8 to $5.6 billion, with approximately one-third of revenue in the 2030 financial year expected to come from products and services outside the solar tracker segment. The share price reaction to the outlook was quite negative – after Capital Markets Day, the share price fell by 8% and then by another 9% the following day. However, we consider the reaction to be exaggerated – Nextpower tends to keep expectations low and then exceed them. We have been invested since the IPO in 2023, and since then, the company has been able to announce a "beat and raise" every quarter, i.e. exceeding analysts' expectations and raising its outlook at the same time.  

We assume that Nextpower deliberately set the outlook low to make it easier to achieve or exceed the figures. Management has also hinted at this in its comments. We prefer this cautious communication combined with solid execution – "underpromise and overdeliver" is Nextpower's mantra. The company has one of the most experienced management teams in the industry and a high level of customer satisfaction, as it has been shown that developers who have worked with Nextpower once usually stay with the company for a long time.  

These are all reasons for us to continue to view the company constructively, which is why it is currently one of our largest positions in the fund. 

Note: Please note that investing in securities involves risks as well as opportunities.

Chart 2: Nextpower's core product: trackers that align solar panels with the sun thereby increasing their efficiency
Source: Nextpower, https://nextpower.com/post/case-study/nx-horizon-xtr-case-study

Positioning & Outlook

We continue to focus strongly on the energy segment which accounts for the majority of the portfolio in both funds. We see the greatest long-term and structural opportunities here due to favourable valuations and high earnings growth. In contrast, stocks in the water sector have become very expensive, and there are currently few bargains to be found in recycling either. The regional allocation has changed only marginally. Most recently, we have taken increased profits from companies such as First Solar, Sunrun, Shoals and Bloom Energy and, on the other hand, invested in electrification stocks such as Hubbell, Rexel, Elia and Pfisterer. 

The first few weeks of the new year are already proving to be quite volatile, both on the market and geopolitically. Our funds are not immune to volatility either, but we are focusing on long-term megatrends and are convinced that these will prevail in the long run. 

Note: Please note that an investment in securities entails risks in addition to the opportunities descibed. As part of active management, the aforementioned portfolio positions may change at any time.

Performance opportunities for the funds:

  • The expansion of data centres continues and will require even more energy and energy storage capacity.  

  • Legal stability and strong quarterly figures could bring more generalists and thus inflows of funds into the environmental technology segment  

Performance risks for the funds:

  • The grid infrastructure remains a bottleneck and could delay the expansion of renewable energies 

  • Tariffs and other political noise remain and will continue to cause volatility in the market and in individual stocks 
     

ERSTE WWF STOCK ENVIRONMENT carries the LuxFLAG Impact Label since January 2026.

Overview Performance

ERSTE WWF STOCK ENVIRONMENT

Note: Past performance does not allow any reliable conclusions to be drawn about the future performance of the funds. The performance is calculated according to the OeKB method. The performance assumes a full reinvestment of the distribution and takes into account the management fee and any performance-related remuneration. The one-off front-end load that may be incurred upon purchase and any individual transaction-related or ongoing income-reducing costs (e.g. account and custody account fees) are not included in the presentation.

Institutional share classes

AT0000A20DU5 = Distributing share (A)
AT0000A20DV3 = Accumulating share (VT)

Retail share classes

AT0000705660 = Distributing share (A)
AT0000A03N37 = Accumulating share (VT)

ERSTE GREEN INVEST

Note: Past performance does not allow any reliable conclusions to be drawn about the future performance of the funds. The performance is calculated according to the OeKB method. The performance assumes a full reinvestment of the distribution and takes into account the management fee and any performance-related remuneration. The one-off front-end load that may be incurred upon purchase and any individual transaction-related or ongoing income-reducing costs (e.g. account and custody account fees) are not included in the presentation.

Institutional share classes

AT0000A2KVV7 = Distributing share (A)
AT0000A2KVW5 = Accumulating share (VT)

Retail share classes

AT0000A2DY42= Distributing share (A)
AT0000A2DY67 = Accumulating share (VT)

Overview performance contribution in %

ERSTE WWF STOCK ENVIRONMENT

Best & worst performer

ERSTE GREEN INVEST

Best & worst performer

Source: Erste Asset Management, FMP, data as of 28 November 2025; gross performance data (before deduction of management fee) *Contributions determined at fund and allocation level; the above portfolio positioning may change at any time as part of active management. 

Fund management

Clemens Klein

Lead-Manager ERSTE WWF STOCK ENVIRONMENT

... is a Senior Professional Fund Manager in the equity team of Erste Asset Management. He has been investing since 1992. At the beginning of his career, he was an investment specialist and portfolio manager at Erste Bank. He then moved to ERSTE-SPARINVEST KAG (formerly a subsidiary of Erste Asset Management) in 2005. Initially, he focused on managing US equities as part of the Developed Markets Equities team before specialising in the management of sustainable equity funds in 2011. He is currently the lead manager for a range of global sustainable equity strategies with a focus on impact.

Alexander Weiß

Lead-Manager ERSTE GREEN INVEST

...has been a fund manager in the equity team at Erste Asset Management since July 2021. He is the lead manager of the ERSTE GREEN INVEST mutual fund. In addition, he is co-manager of the mutual funds ERSTE WWF STOCK ENVIRONMENT, ERSTE STOCK ENVIRONMENT, and a special fund mandate that takes advantage of opportunities in the area of climate change.

Disclosure, taxonomy & labels

Source: Erste Asset Management, Data as of 28.11.2025

Overview Erste AM environmental strategies

Source: Erste Asset Management; Data as of 28.11.2025

General information on the funds mentioned

Disclaimer

This document is an advertisement. Please refer to the prospectus of the UCITS or to the Information for Investors pursuant to Art 21 AIFMG of the alternative investment fund and the Key Information Document before making any final investment decisions. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to Art 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011.

The fund prospectus, Information for Investors pursuant to Art 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the  web site www.erste-am.com within the section mandatory publications  or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the fund prospectus or the Information for Investors pursuant to Art  21 AIFMG and the Key Information Document are available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to Art 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to Art 21 AIFMG for restrictions on the sale of fund shares to American or Russian citizens. Misprints and errors excepted.

The public sale of shares in the specified fund in Germany was registered with the Federal Financial Supervisory Authority, Bonn, pursuant to the German Kapitalanlagegesetzbuch (KAGB). The issue and redemption of unit certificates and the execution of payments to unit holders has been transferred to the Fund's custodian bank/depositary, Erste Group Bank AG, Am Belvedere 1, 1100 Vienna, Austria. Redemption requests can be submitted by investors to their custodian bank, which will forward them to the Custodian Bank/Depositary of the Fund for execution via the usual banking channels. All payments to investors are also processed via the usual banking clearing channel with the investor's custodian bank.. In Germany, the issue and return prices of shares are published in electronic form on the web site www.erste-am.com (and also at www.fundinfo.com). Any other information for Shareholders is published in the Bundesanzeiger, Cologne.

Presentations:

It is expressly noted that presentations shall not be construed as providing investment advice or investment recommendations; presentations simply represent the current market opinion. The presentations are not intended as sales instruments and shall therefore not be construed as an offer to buy or sell financial or investment instruments. The investor shall be solely responsible for any and all decisions that he makes on the basis of this presentation.