Global Climate Opportunities 4Q24 Commentary

January 22, 2025

Investor Letters

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Global equity markets sustained their strong 2024 rally through the fourth quarter following the Trump win in the US presidential election. US markets responded positively to prospects of stronger economic growth, reduced corporate tax rates, and a more favorable regulatory and M&A environment. Performance from the U.S. equity markets has been unprecedented. The S&P 500 logged its second consecutive year of 20%+ returns for the first time since 1998, setting 57 record highs. In contrast, foreign markets underperformed the U.S., both in 4Q and for the full year, reflecting concerns about slowing economic growth in Asia and Europe.

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Bond markets did not share in the optimism from the equity markets: US Treasury yields rose in response to hawkish comments by the US Federal Reserve and uncertainty around the new Administration’s policy proposals on tariffs and immigration leading to increased inflation risk.

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The climate investment sector faced significant challenges throughout 2024, with 4Q marking a particularly tough period due to concerns around potential rollbacks to existing climate policy in the US and rising interest rates. However, there were bright spots which included grid infrastructure companies benefitting from the growing electricity demands of Artificial Intelligence (AI), and wateroriented companies benefitting from a global capital expenditures cycle.

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Global Climate Opportunities 4Q24 Commentary

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Global Climate Opportunities 4Q24 Commentary

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