Impax Environmental Markets (IEM) has a strong long-term track record, having beaten both the FTSE ET50 Index of the largest pure-play environmental technology companies, and the broader MSCI All Country World Index over 10 years. However, over three and five years it has not beaten the MSCI All Country World Index, partly because of the difficult time the environmental sector has been going through.
However, Impax has beaten the FTSE ET50 Index over three and five years, and still achieved double-digit positive returns over these periods. It states in its most recent interim management statement that it "remains positive on the outlook for equity markets into 2014, while recognising the potential for consolidation in the near term. Prospects continue to strengthen based on an improving macro outlook in key industries, notably automotive and construction, and at a micro level on improving fundamentals in a number of environmental markets. The portfolio represents a basket of high-quality growth companies which are well positioned to perform in the long term."
Bruce Jenkyn-Jones, the trust's manager, explains that the difficult economic environment is starting to improve and there has been an upturn in some of the trust's critical markets, which include infrastructure and industrial. "As these get better our companies do well, which is why we now expect to outperform," he says. "There are also lots of new initiatives on products that allow users to increase their efficiency, as well as a boost from regulation. The outlook is positive for the main sectors we invest in: energy, water, waste, and sustainable food and agriculture."