British fund manager Schroders has launched a new fund, which targets the shift towards a low carbon energy system.
The new fund, called Schroder ISF Global Energy Transition, is a long-only portfolio of 30-50 stocks.
It will support clean energy-focussed investments, covering renewable power production, transmission, distribution and storage, smart grid technologies and electric vehicle charging.
Companies offering exposure to nuclear or fossil fuels will be excluded from this list.
The fund is said to have a bias towards ‘best-in-class’ firms and those that display improvement.
The focus will be on three trends, namely the “decarbonisation of power generation, the electrification of energy use and increased energy efficiency for its investment process”.
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The vehicle will be run by the fund manager’s commodities and resources investment team.
Schroder ISF Global Energy Transition fund manager and Schroders head of commodities Mark Lacey said: “The energy transition opportunity is vast with around $120 trillion of investment into the sector required by 2050 to meet globally agreed climate goals.
“This tremendous investment, coupled with growing consumer demand for clean technologies, is creating strong real earnings growth opportunities for companies in this space which in turn we hope will benefit our clients.
“A significant inflection point has now been reached in the last two years which is allowing companies in the sector to become attractive investment opportunities. We therefore believe this could be a beneficial time for our clients to allocate to energy transition. Crucially, our focus will be on the energy system and the associated technologies needed to enable its change.”