Sustainable investment is already the theory of the asset management industry. If five years ago, funds with an environmental profile were still rare, today all companies share the honor of being pioneers in this matter.
not all The Spanish boutique Azvalor has shown its “opposite political correctness” thinking and bet on the accursed sector. This year, his vision is to bear fruit and his funds are achieving record returns. So far in 2022, its flagship product has returned 15% while most funds are at a loss.
The companies that Azvalor Internacional invests in may seem like a conglomerate of bad movies: Arch Resources (a US coal mining company); Whitehaven Coal (Australian leader in coal production); Tullow Oil (a British company with oil wells in Ivory Coast, Gabon, Ghana …); Barrick Gold and Endeavor Mining (mining companies specializing in gold mining, with mines in Latin America and Africa).
Azvalor management does not hide. In their latest sustainability report, they explain that the phenomenon of investors with environmental, social and good governance (ESG) assumptions and what is politically correct “leads a growing number of investors and institutions to completely abandon sectors that are absolutely necessary to maintain. and improve well-being globally.
The rise of societal investment puts more and more executives under pressure to sell their positions in polluting industries or producers of mineral energy. Now those companies still exist and someone has to buy the shares that the managers sell. Among the usual suspects to take advantage of these opportunities are hedge funds, in the egg case, which do not have as many green scruples. One of the most famous managers of this type of fund in the UK, Crispin Odey, recently explained that institutional investors “are so prone to get rid of oil assets that they leave a great return on the table”. In light of investors’ rejection of open funds, some private limited companies have begun to buy these types of cursed companies in order to remove them from the stock market.
This is not Azvalor’s approach. “Within corporate culture values in line with the free market, the company has wisely decided not to exclude any sector in general.”
One of the things that has worked best for him in recent years has been uranium. Cameco, the world’s largest producer of these basic elements for nuclear energy, has been one of the largest in the Azvalor International Fund.
This company doubled its value between November 2019 and November 2021, which led to the sale of Azvalor. He did the same with Yellow Cake, SPUT and two other companies in the sector.
Azvalor’s management has always defended the importance of nuclear power plants in reducing their dependence on fossil fuels. Recently, the European Union agreed with it when it recognized nuclear energy as “green energy” in January at least until 2045.
He also did not jump on the bandwagon of misunderstood environmental protection, with the production of organic food, which is so fashionable in many environments. On the contrary, Azvalor has chosen to invest in fertilizers such as potassium or phosphate, with positions in Mosaic, OCI, SQM, CF Industries, which have yielded very good returns.
The floor of the accursed companies, also in Azvalor’s portfolio, is a company that has the right to use land in Canada, to resell it to oil and gas production companies. Canons cover 40,000 square kilometers. The equivalent of Extremadura.
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