The Fund recorded a gain of 1.59% in April (C Accumulation GBP), taking the strategy’s performance into positive territory year-to-date. This was achieved against a volatile backdrop for capital markets, as the outlook for the global economy was jolted by the U.S. President’s intention to impose wide-reaching and punitive tariffs on its trading partners. Over the course of the month, interest rate probabilities discounted the prospect of more aggressive rate cuts in the UK and the US during 2025, providing a tailwind for the companies held within the portfolio owing to the long-dated, contracted nature of their revenue streams and more defensive characteristics.

A significant majority of underlying portfolio companies contributed positively to performance. The Fund’s exposures to UK-listed renewable power generators were notably strong performers. Meanwhile, US-focused names with greater sensitivity to new project developments, such as XPLR Infrastructure, were among the few detractors. These companies potentially face higher costs as a result of tariffs being imposed on components imported from key international markets and where limited domestic manufacturing and supply chain capability exists. Recent addition, Terna Rete Elettrica, continued to perform well.  

Competitive tension in the race to acquire Harmony Energy Income stepped up in April as Foresight Group returned to counter the 88p/share bid tabled by Drax Group with a 92.4p/share cash bid, which represents a very slight uplift against Harmony’s latest NAV. Harmony’s peer, Gresham House Energy Storage, continued to benefit from the direct read across to its own portfolio of BESS assets and the shares continued to re-rate.

During the period, the exposure to Canadian-listed Innergex Renewable Energy was reduced quite significantly. The company, soon to be acquired by Caisse de Depot et Placement du Quebec and therefore trading marginally below the takeover price, provides a ready source of capital with limited scope for upside.