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    IMPQ February 2022 Monthly Report & Update

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    IMPQ Monthly Report
    • The market was dominated by geopolitical events during February following Russia’s invasion of Ukraine. Much like last month, the market favoured resource stocks while growth stocks were weaker. This resulted in IMPQ finishing the month down 2.7%, underperforming the benchmark by 2.7%.
    • It is coming up to three years since inception of the Fund. It is a key goal of the Fund to demonstrate that there is no performance trade-off to invest for shaping a better future. Since inception, the Fund has delivered a 12.4% p.a. return net of fees, outperforming the benchmark by 5.5% p.a.
    • Positive contributors to relative performance this month included recycling company Sims Ltd (28.1%), Meridian Energy (+10.5%) and Smartgroup (+17.2%).
    • Negative contributors this month included Telix Pharmaceuticals (-27.2%), Janison Education (-20.3%) and Integral Diagnostics (-13.6%).
    Performance
    Month (%)Quarter (%)FYTD (%)1 Year (%)2 Year (%)Since Inception* (% p.a.)Since Inception Cumulative* (%)
    eInvest Better Future Fund-2.7-9.9-5.83.714.212.438.4
    S&P/ASX Small Ordinaries Index0.0-7.7-4.05.010.96.920.4
    Added value (detracted)-2.7-2.2-1.8-1.33.35.518.0

    ^Inception date was 23 May 2019. IMPQ returns are calculated using net asset value per unit at the start and end of the specified period and do not reflect the brokerage or the bid-ask spread that investors incur when buying and selling units on the ASX. Past performance is not a reliable indicator of future performance.

    Better Future Highlights

    Sims Ltd is a global metal and electronics recycling business which fits into the theme of the circular economy and resource efficiency. The company purpose is to “create a world without waste to preserve our planet”.

    At the 1H22 Result, they demonstrated that they had made pleasing progress towards their sustainability strategy.

    During the half year they were able to meet their board gender diversity target (50%) and achieved an employee engagement score of 82%. They continued to drive safety improvements in the business.

    They produced their first TCFD report on climate risk and opportunity and were able to reduce carbon emissions by 4% compared to the corresponding period. They have begun looking at their Scope 3 emissions profile.

    They also spend $644,000 with indigenous-owner businesses as part of their Reconciliation Action Plan.

    Fund Review

    The market was dominated by geopolitical events during February following Russia’s invasion of Ukraine. Much like last month, the market favoured resource stocks while growth stocks were weaker. This resulted in IMPQ finishing the month down 2.7%, underperforming the benchmark by 2.7%.

    It is coming up to three years since inception of the Fund. It is a key goal of the Fund to demonstrate that there is no performance trade-off to invest for shaping a better future. Since inception, the Fund has delivered a 12.4% p.a. return net of fees, outperforming the benchmark by 5.5% p.a.

    Positive contributors to relative performance this month included recycling company Sims Ltd (28.1%), Meridian Energy (+10.5%) and Smartgroup (+17.2%).

    Negative contributors this month included Telix Pharmaceuticals(-27.2%), Janison Education (-20.3%) and Integral Diagnostics (-13.6%) although there was general weakness in a number of the other growth stocks held by the Fund.

    Sims announced a better than expected half year result and outlook as demand for recycled metal increases as the world looks to produce steel from less greenhouse gas intensive sources.

    Meridian Energy announced a better than expected half year result and also announced that the company’s project to investigate the feasibility of the world’s first large-scale green hydrogen plant is progressing more quickly than expected. It has selected four substantial global companies as potential partners for the next phase of the project. The commercial production of green hydrogen is a key step on the path for the world to decarbonize and Meridian’s hydro energy is relatively well-suited to this application.

    Smartgroup announced a better than feared full year result and significant special dividend.

    Telix Pharmaceuticals delivered a full year result which was largely in line with expectations, but the stock was caught up in growth stock weakness.

    Janison Education delivered a weaker than expected result due to headwinds in an umber of key business areas due to ongoing COVID disruptions. Integral Diagnostics was weaker after confirming soft half year results and raising capital to acquire the Peloton diagnostic imaging business which is located in Southeast Queensland. While organic revenue growth has been solid, the company has been impacted by higher costs associated with managing COVID and we expect the company’s profitability will recover as headwinds ease.

    During the month we participated in the Integral Diagnostic capital raising. We also participated in a capital raising by Next Science which is expected to fund the ramp up of US sales of the company’s  Xperience product. The Xperience product is more effective than existing products to prevent and treat bacterial infections in hospital environments.

    At month end, the portfolio held 49 stocks and cash of 6.9%.

    At February end, the weighted average Perennial-derived Environmental, Social, Governance and Engagement (“ESGE”) Score of the Fund was 7.3 which is 27% higher than the benchmark ESGE Score of 5.7.

    ESG Activity

    Our ESG activity during the month included:

    • Immutep and Janison Education appointed a female to the board after discussions with both companies on gender diversity.
    • 3P Learning reinforced the focus on the social element of ESG, particularly education and their work with the Click Foundation which is helping kids in lower socio-economic countries to learn to read. They have diversity targets at both a board and management level and have identified their largest emission sources.
    • Steadfast announced a Carbon Neutral Transition Plan. This is a topic on which we have recently engaged with the company.
    • We had a dedicated ESG meeting with G8 Education to discuss sustainability, GHG emissions, SASB reporting and gender diversity.

    To read more about eInvest Better Future Fund (Managed Fund) ASX: IMPQ, click here.

    Interested in purchasing units in the fund? Contact your financial adviser or simply purchase via your online broker, and as always read the PDS for more information. This can be found here. 

    Past performance is not a reliable indicator of future performance. Please read the PDS prior to investing. This information is general in nature and is subject to the terms and conditions outlined here.