Semiconductors in the spotlight

Over the past 10 years, semiconductor companies have become an important area of investment for clean energy funds, writes Morningstar’s Ronald van Genderen

Ronald van Genderen, senior manager research analyst, Morningstar


Ronald van Genderen, senior manager research analyst, Morningstar

Opportunities arising from the energy transition haven’t gone unnoticed by investors. Demand for funds investing in the clean energy space have increased tremendously in recent years. Morningstar groups these kinds of funds in the equity alternative energy category, and for years, total assets under management hovered between €3bn (£2.6bn) and €5bn.

In 2020, investors suddenly rushed into clean energy funds, and net inflows reached almost €13bn. The following year, another €12bn of new investor money flooded in. Inflows relaxed after that but remained in positive territory. As of July 2023, total assets stand at €38bn, or eightfold the level seen three and a half years ago.

Over time, the clean energy space has changed. Roughly 10 years ago, the focus was mainly on companies operating in areas such as solar and wind or on utility companies, typically those that had started to phase out fossil fuels and replace them with renewable energy sources.

It might come as a surprise, but 10 years ago, clean energy funds on average still had 10% allocated to the energy sector, including oil and gas companies. That exposure has decreased to 0.3% as of June 2023.

Read the full comment in ESG Clarity’s October 2023 digital magazine.

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