Portfolio Review - End March 2021

Well, what a dramatic year. We went into a global lockdown last March, eased up during the summer months and then we were hit by a deeper second wave during the winter months as new cases rose exponentially, hospitals were severely stretched and deaths here in the UK rose to over 125,000. Clearly we have experienced a global pandemic crisis which has a social impact not seen since the second world war. This experience will remain long in our memory banks.

Naturally there has been volatility on the markets, especially the initial shock. In March last year the FTSE saw its largest one-day fall - 10.8% - since 1987 with a similar pull-back in the US where the Dow Jones recorded its biggest one day points fall of over 3,000. Then, a week later, the FTSE records its biggest one-day points jump of 452 and the Dow Jones climbs a record 2,100 points and the biggest gain for 90 years...remarkable...the global markets don't get any more dramatic than this. However, despite the pandemic, the markets turned out to be remarkably resilient and have weathered the storm well...so far.

Portfolio Changes

The turbulence last year provided an opportunity to pick up a few bargains and the likes of Google, Microsoft, McPhy, Ceres Power, Nibe and Tesla were added to my portfolio. Later in the year following the election of Joe Biden I added Plug Power, Enphase and SolarEdge as well as the more eco-friendly global index fund, iShares World SRI ETF.

In the past few months I have sold down my government bonds and Tesla and also reduced my renewable infrastructure sector. The proceeds have been used to top up several of my clean energy holdings including Vestas Wind, Orsted, Enphase and SolarEdge and also add the likes of the new L&G Hydrogen ETF.

Portfolio Returns

By the end of 2020, the FTSE 100 had lost 11% for the year and stood at 6,460. It has since risen to currently 6,750 or 4.5% plus dividends. Looking more widely, my iShares World SRI fund is up 5.4% over the first quarter.

Although no longer a part of my portfolio due to fossil fuel holdings, the Vanguard Lifestrategy 60 fund is a diverse mix of global equities and bonds and provides a good benchmark for a balanced global portfolio. The fund is up 0.9% over the past 3 months.

I had my best ever year in 2020 with a total return of 44% and over 50% from my green portfolio holdings so I have been expecting some correction or pull-back in the new year. The past couple of months have seen quite a bit of volatility in the technology sector and my clean energy holdings seem to have been caught up as well. As a whole my portfolio is down 7.2% over the quarter.

Green Funds

These holdings now make up around 85% of the total portfolio. They mostly had a stellar 2020 but have fallen back around 10% to 15% over the past couple of months. 

However, over the full year since last March many are showing remarkable gains - 

ITM Power share price was 110p last year and currently 470p, a gain of 325%, 

Ceres Power was 325p and now 1250p, gain 280%, 

McPhy was €4.60 and now €32.60 a gain of 590%, 

Enphase was $29.77 and now $162 gain 444% and 

Plug Power $3.30 a year back and now $35.80 gain 980%. 

Past 12m for Ceres and ITM Power
(click image to enlarge)

However over the past 3 months most of these shares are down...ITM  -9%, Ceres down 5%, McPhy down 11%, Enphase down 11% and only Plug gaining 8%.

So I am hoping this is a short-term correction and these holdings can get back on the rising escalator over the rest of this year and beyond.

Conclusion

It is getting on for 30 months since I started to move my portfolio towards more climate-friendly investments and it is reassuring to see they have held up reasonably well during this past year. I certainly feel much better investing in the likes of Orsted, a global leader in offshore wind, rather index funds with their fossil fuel companies and the big banks that finance their operations.

Our attention has been very much focused on Covid this past year but with a vaccine roll-out now underway I am hoping we can move on to tackle the far bigger crisis of climate change. There are encouraging signs that the global leaders are starting to sing from the same hymn sheet and work out how to cooperate to reduce emissions and meet the goals of the Paris Agreement to limit warming well below 2.0C. The transition from fossil fuels to clean energy is well underway. Huge amounts of financial support is being directed into this area as governments move to decarbonise their economies and this along with policy shifts should support the growth of those companies trying to provide some of the solutions to this climate emergency. 

Let's see how the rest of the year unfolds..."Survival as an investor over that famous long course depends from the very first on recognition that we do not know what is going to happen. We can speculate or calculate or estimate, but we can never be certain". (Peter Bernstein)

Take it easy...have a lovely Easter!

As always, if you keep track of portfolio returns, feel free to leave a comment and share with others how your investments have fared over recent months.