The Fund recorded a loss of 3.82% in August (C Accumulation GBP) as recent positive momentum stalled over the summer. The Bank of England reduced interest rates from 4.25% to 4.00%, marking the fifth 25bps cut to interest rates since policy pivoted in August 2024. However, longer-dated gilt yields moved higher over the course of the month in the UK, as did reference yields in other key regions for the Fund, including North America and Europe.

While the upwards shift in reference yields was undoubtedly a key headwind to performance, the Fund’s exposure to UK-listed renewable energy generators suffered following a poor reporting period. Broadly speaking, second quarter NAV updates were negatively impacted following reductions to forecast power price curves. Meanwhile, power generation from wind assets came in under budget owing to very poor wind resource during the period, but robust irradiation resource meant that the operational performance of solar-focused generators was relatively better.

European-listed exposures were also generally weak, but this did not reflect a reaction to poor results with the likes of EDP Renovaveis, Acciona Energias, and ERG delivering robust Q2/HY results and maintaining guidance for the full year. North American exposures showed significant divergence in performance over the month with Clearway Energy Inc., Brookfield Renewables Corp. and Boralex providing meaningful headwinds, while HA Sustainable Infrastructure and XPLR Infrastructure contributed positively. After a strong rally, which began in April in the wake of President Trump’s global tariff threats and related concerns around the risks to the broader global economy, a pause in the Fund’s momentum is perhaps understandable. As noted in recent commentary, the regulatory clarity provided in key regions such as the US (following the “One Big Beautiful Bill) and the UK (REMA/zonal pricing, AR7/CFD amendments) provide a base from which the sector could move forward.

During the month, a modest reduction was made to the holding in Foresight Environmental Assets. An incremental addition was made to the existing holding in Boralex. Downing Renewables & Infrastructure received shareholder support for the company’s recommended cash acquisition by its largest shareholder, Bagnall Energy Limited. The transaction is anticipated to complete in H2 2025.