Newsletter
Environmental strategies

Q2 2026

Quarterly report of the fund management

As it does every year in late March, Roth Capital Partners once again hosted the 38th Annual Roth Conference in California. The conference is one of the largest and most important events in the small-cap sector, particularly in the renewable energy and clean-tech segments. All companies active in this sector were in attendance—and we were there for the fifth time.

 

The agenda included over 20 meetings with the most important companies in our funds (~25% of the fund’s volume) - the majority of which were one-on-one discussions and almost exclusively at the executive level. The packed schedule was further complemented by several exciting panel discussions. Since the earnings season for the first quarter of 2026 and the 2025 fiscal year had already concluded, we were able to discuss the current environment quite openly. The key points are summarized briefly here:

  • The current environment for energy and electricity is the best the participants have ever seen! We’re talking to CEOs here, some of whom have been active in the sector for 40 years or more - and they all agreed: The environment for demand and pricing power is very strong. Utilities that used to plan purely on a project-by-project basis are now discussing 5- to 10-year framework agreements. The bull market in electricity is real and appears to have plenty of room to grow. All of this was already the case before the current Iran conflict and is all the more valid now. Note: Investments in securities involve risks as well as opportunities.
  • The rising demand for electricity is enormous - driven by data centers for artificial intelligence and the unstoppable electrification of the economy and households. A comparable situation last occurred in the post-war era with the introduction of air conditioning and electrical appliances in private households. That boom lasted nearly 60 years. Of course, no one knows today how long this new cycle will last - though companies currently see not the slightest sign of a slowdown.
  • The motto of the hour is: Every (energy) molecule is needed. Nuclear energy and gas continue to play an important role in this mix, but they simply take too long. For a conventional gas turbine, the wait is three to four years today, and the actual construction of the power plant then takes another two years. Nuclear projects have even longer implementation phases - even the much-discussed SMRs (Small Modular Reactors) will remain a topic for the post-2030 era. The energy sources that can be brought online the fastest are currently clearly renewables. Wind and solar are also the cheapest energy sources. Batteries are increasingly taking center stage: With the growing penetration of renewables, the use of battery storage can help arbitrage price differences and massively stabilize the entire grid.
  • The age-old truism that fossil fuels are a priority for the political right and renewables for the political left is looking increasingly outdated. The current U.S. administration is fully aware that, at the moment, we must utilize every energy source available. Imposing arbitrary ideological restrictions here makes no sense. The global race for AI dominance is inextricably linked to the race for military supremacy. Energy supply is thus primarily a matter of national security - see the current conflict with Iran. Consequently, one is hearing increasingly positive remarks from the current administration regarding wind and solar power. While “Tweeter-in-Chief” Donald Trump himself is unlikely to change his public rhetoric, those in the second tier of government view the issue with a much more sober and pragmatic perspective. It is no coincidence that Texas, a classic oil-and-gas state, is now number one in wind power, number one in solar, and number two in batteries - and is well on its way to dethroning California there soon.
  • Discussions with other investors, however, also painted a very clear picture of the current market sentiment: The majority of conference participants consisted of representatives from hedge funds. Their positioning remains more on the short side than the long side. Many traditional long-only investors are still not involved in the segment. We’re seeing this in our mutual funds as well—the big inflows are still a long time coming. This is interesting in that the companies’ performance has been exceptionally strong recently. However, we view this strong presence of hedge funds as fundamentally positive. Investors are still positioned short in the market because this strategy has (unfortunately) worked very well since 2021. What is the strategy behind this? Well, high interest rates lead to high capital and refinancing costs, and these naturally weigh on balance sheets when revenues are only expected in the future. Numerous companies in the renewable energy sector face high capital costs early on due to their business models - thus, this segment suffered particularly from the historically steep and rapid rise in U.S. interest rates. No paradigm shift in perception has yet taken place here, as short interest in some of our individual stocks now exceeds 25%! Traditional fund managers remain on the sidelines; there is still no sign of euphoria. However, this also confirms our view that we are still very early in this new cycle and that the positive performance can continue for some time - provided, of course, that the companies continue to deliver on their promises - as revenues are gradually being generated, and some are now even paying dividends. This is quite remarkable, as the renewable energy sector is generally viewed and valued as a growth sector from an allocation perspective.
  • All these impressions were naturally very US specific since this was a US conference and the US is the largest market, that makes sense. However, participants were also increasingly optimistic about growth in Europe. Here, a further massive push toward renewable energy is expected, primarily due to the Iran conflict and the high degree of dependence in the oil and gas sector.

    Note    : Investments in securities involve risks as well as opportunities.

Company Spotlight: Nordex & Vestas

But there were also some significant developments for individual companies in the first quarter. For example, the wind energy sector performed very well - Nordex has risen by over 50% since the start of the year and doubled over the past year, while Vestas Wind gained over 130% last year.

Both companies are benefiting from strong order intake and the increasingly profitable environment for wind turbines. At Nordex, it is primarily the European onshore business, driven by its home market of Germany, that is providing the momentum (see Chart 1).

Vestas is generally more focused on the U.S. market, though its strength also stems from the recently stronger demand from Europe - the company ended 2025 with the largest order backlog in its history. In addition, the announced orders for Q1 showed very strong growth in the offshore sector - a new record was set here as well.

After a prolonged slump, the outlook for the wind segment is increasingly positive again; both Vestas and Nordex rank among the top holdings in both the ERSTE WWF STOCK ENVIRONMENT and the ERSTE GREEN INVEST funds.

Note: The companies mentioned in this article were selected as examples and do not constitute an investment recommendation. Past performance is not a reliable indicator of future results.

Chart 1: Onshore and Offshore new installations in Europa 2025

Quanta Services, a company in the ERSTE GREEN INVEST portfolio, also held a Capital Markets Day. This event is particularly noteworthy as it highlights the key trends in the U.S. energy market.

Note: As part of active management, the portfolio holdings mentioned may change at any time. The companies cited in this article were selected as examples and do not constitute an investment recommendation.

Quanta Services is North America’s largest specialist in critical infrastructure - specifically, the company builds, modernizes, and maintains the physical infrastructure that transports electricity and data across the continent.

In recent years, Quanta Services has transformed itself from a traditional, decentralized contractor into an integrated infrastructure service provider. A company that offers its clients not only labor but also transparent cost and schedule planning, or supports them in the execution of expansion projects.

What makes this story particularly interesting is that it reflects the convergence of several megatrends simultaneously - the expansion of power grids for AI data centers, the more efficient electrification of industry and buildings, and the rebuilding of manufacturing capacity in the U.S - all of which ultimately land as contracts with Quanta.

Added to this is vertical integration into the supply chain, for example through the expansion of high-voltage transformer capacity, which is set to nearly double by 2028 - a strategic move that eliminates bottlenecks and strengthens customer loyalty. The key financial targets from Investor Day:

  • 7–10% organic revenue growth,
  • 15–20% adjusted earnings per share (EPS-CAGR)
  • $10–12 billion in cumulative free cash flow by 2030.

Analysts consider these assumptions conservative and expect the company to grow even more strongly - over the past 3 years, the EPS-CAGR has actually been >19%. Quanta Services is in the right place at the right time - the topic of electrical infrastructure and grid expansion is one that will remain relevant for years to come and has the potential to deliver above-average growth rates.

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

Positioning & Outlook

In our two environmental technology funds as well, we continue to focus increasingly on the rapidly rising demand for electricity. The data center boom, combined with the growing relocation of production capacity (keywords: defense, critical infrastructure), is driving a long-term surge in energy demand.

The current conflict in Iran has also reminded us once again that energy security is synonymous with national security. Europe had already received a wake-up call - in 2022, when Russia invaded Ukraine - but this quickly faded, as Europe remains a net importer of energy. In 2020, approximately 58% of energy demand was met by imports - this figure has not improved despite the war in Ukraine, but according to current estimates for 2025, it is actually even higher! Now we can only hope that strategic measures will be implemented more consistently this time and that Europe will position itself to be more energy-independent. This also includes the expansion of renewables, grid capacity, and more efficient use and storage - because a diversified and smart energy supply has the potential to cushion price shocks in the energy sector.

For the reasons mentioned, we have increased our investment in Europe within the funds (~36% ERSTE WWF STOCK ENVIRONMENT, ~37% ERSTE GREEN INVEST). In addition, we have increased our exposure to the energy sector (~73% ERSTE WWF STOCK ENVIRONMENT, ~62% ERSTE GREEN INVEST), partly because earnings prospects there are currently better than in our other thematic areas.

The megatrend of environmentally friendly energy production has taken on a new and, for many, unexpected dimension - namely, that of geopolitical independence in energy production.

Note: Please note that investing in securities involves risks as well as opportunities. As part of active management, the portfolio positions mentioned may change at any time.

Performance opportunities for the funds:

  • Strong geopolitical arguments in favour of Europe: The Iran conflict is bringing the issue of energy security back into the spotlight.

  • Phenomenal environment and long-term visibility: Utilities are now entering into 5- to 10-year framework agreements rather than operating on a project-by-project basis.

Performance risks for the funds:

  • Although the negative correlation with interest rates has eased recently, rising interest rates would still be bad for our segment

  • Political noise continues to cause volatility, even though the fundamentals remain strong.

     

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 February 2026; 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 February 2026

Overview Erste AM environmental strategies

Source: Erste Asset Management; Data as of 31 March 2026

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.