Elliot Gulliver-Needham, Investment Week, 10 February 2023:
Russia’s invasion of Ukraine, spiralling inflation and a renewed focus on energy security defined 2022, leading to a rapid evolution of investor attitudes towards the energy sector…
According to the World Bank, energy prices in 2023 are expected to be 75% above their average over the past five years, even if, as forecast, costs moderate this year compared to 2022.
Numerous tailwinds
Almost a year on from the start of the war in Ukraine, Metcalfe said “virtually all forms of energy will have significant tailwinds”, though the source of these will be specific to each type of energy source…
Asset allocation
James Carthew, head of investment companies at QuotedData, said there were some energy funds trading on a discount, which offer “attractive yields and the prospect of decent dividend growth”.
He pointed to Ecofin US Renewables, which has a 12.4% discount and 6.7% yield, and NextEnergy Solar, which has a 10.1% discount and 6.5% yield.
Carthew said that Ecofin US Renewables, a portfolio of solar and wind assets in the US, came with long-dated power purchase agreements, “which make its revenue quite predictable”.
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