Greencoat UK Wind

MonroeM

I was considering investing in Greencoat because I feel it has potential in the renewable market. However, would it be better to invest in a fund/ETF such as INRG or an IT such as Ecofin Global Utilities? Thoughts welcome.

Another_Saver

All of these are essentially infrastructure/utilities holding companies (whether listed as such or as a fund, this is what they function as). I have no idea how well they will do, I think they'll do at least fine and you can probably expect your returns to equal the dividend yield in real terms (which would be a very satisfactory outcome). The main concerns with infra/uti people miss is that you are investing in fixed assets, like real estate. If you bought a BTL, you would not expect it to grow with the economy. If you bought a diverse portfolio of businesses, you would expect that.
Just because we are transitioning to renewables does not mean putting up the capital now, is necessarily a growth opportunity.
These assets need maintenance and insurance, they depreciate. Energy is a very regulated sector, prices are held down by the government, demand is finite, unlikely to grow (I think @AnotherJoe has referenced some research from the national grid about the need or lack of need for increased electricity capacity to accommodate the transition to electric vehicles) and getting more efficient all the time, at least in developed markets. At a global level there is likely to be growing energy and particularly renewables demand for some decades from emerging markets, problem is you can't tap into that with existing capital, a wind farm in the Netherlands can't supply Egypt's transition away from Nile hydro and oil dependence for example.

The advantages of Greencoat I think come down to the low volatility, the pleasing and RPI linked yield, the social and political tailwind (as opposed to tobacco or oil & gas for example), and the emotional satisfaction.

Bobziz

This is worth a read:
https://www.iea.org/reports/world-energy-outlook-2019/electricity

Thrugelmir

DORE would have provided an entry point for you with it's recent flotation.  Many renewable stocks are trading at premiums/high valuations following a strong run this year. I'd avoid INRG for this very reason. Stocks such as Vestas Wind Systems (which I recently sold at a 94% gain) have limited short term upside. Unlike tech stocks. Energy stocks have no moats. Competition will grow as costs come down. . 

Moe_The_Bartender

Well, INRG is basically an index tracker and being an ETF doesn’t trade at a discount or premium. It’s one I'm happy to hold for the time being. I also hold Vestas and am sitting on a similar profit. At some point it will tail off but companies like this and Siemens Gamesa are like the pick and shovel suppliers who were about the only people other than Levi Strauss who made money out of the Gold Rush. They have massive order books and Vestas have production facilities bordering the North Sea which is the mother lode for wind farmers. I'm happy to continue holding.

To come back to Greencoat Wind, the OP might be interested in VT Gravis Clean Energy Income in which it is the fund's third largest holding.

AnotherJoe

Moe_The_Bartender said:

Well, INRG is basically an index tracker and being an ETF doesn’t trade at a discount or premium. It’s one I'm happy to hold for the time being. I also hold Vestas and am sitting on a similar profit. At some point it will tail off but companies like this and Siemens Gamesa are like the pick and shovel suppliers who were about the only people other than Levi Strauss who made money out of the Gold Rush. They have massive order books and Vestas have production facilities bordering the North Sea which is the mother lode for wind farmers. I'm happy to continue holding.

To come back to Greencoat Wind, the OP might be interested in VT Gravis Clean Energy Income in which it is the fund's third largest holding.

This is why i bought Orsted (and INRG & TRIG the latter of which is a very cautious buy compared to most of my investments) . There's enough business in wind (and solar) for the next 10-15 years to keep every supplier happy.

The writing is not just on the wall its in company accounts.

https://www.theguardian.com/environment/2020/dec/17/australias-newest-coal-fired-power-plant-deemed-worthless-by-japanese-owner

https://www.nsenergybusiness.com/news/us-coal-company-bankruptcies/

or in picture form

Bottom line, its just too expensive to run (in this case, especially Arizona, lot of solar there). Theres a lot of infrastructure to be replaced, and someone's got to supply it.

Apodemus

Moe_The_Bartender said:

Well, INRG is basically an index tracker and being an ETF doesn’t trade at a discount or premium. It’s one I'm happy to hold for the time being. I also hold Vestas and am sitting on a similar profit. At some point it will tail off but companies like this and Siemens Gamesa are like the pick and shovel suppliers who were about the only people other than Levi Strauss who made money out of the Gold Rush. They have massive order books and Vestas have production facilities bordering the North Sea which is the mother lode for wind farmers. I'm happy to continue holding.

To come back to Greencoat Wind, the OP might be interested in VT Gravis Clean Energy Income in which it is the fund's third largest holding.

While I agree that Siemens Gamesa is indeed the "pick and shovel" supplier, Siemens Energy would give you the whole hardware store.  Share price is currently up 34% on when they first became available a few weeks ago, when Siemens hived off all their energy-related engineering. 

Dandytf

@Moe_The_Bartender
Quick scan VT Gravis Clean Energy Income viA HL could be my next Fund.
When HL say it's made up of 50% Non Classified Country's - why such Portion  Non Specified Locations.
thanks.

Moe_The_Bartender

Sorry, but I'm not seeing that. This is the geographical split according to the factsheet.

UK 45.7%, US 26.8%, Canada 14.1% Cash 6.2%, New Zealand 2.6%, Germany 2.4%, Denmark 0.9%, Spain 0.8%, Sweden 0.5%.

bowlhead99

Dandytf said:

@Moe_The_Bartender
Quick scan VT Gravis Clean Energy Income viA HL could be my next Fund.
When HL say it's made up of 50% Non Classified Country's - why such Portion  Non Specified Locations.
thanks.

Moe_The_Bartender said:

Sorry, but I'm not seeing that. This is the geographical split according to the factsheet.

UK 45.7%, US 26.8%, Canada 14.1% Cash 6.2%, New Zealand 2.6%, Germany 2.4%, Denmark 0.9%, Spain 0.8%, Sweden 0.5%.

The HL data will just come from Fundslibrary (the fund data business that HL used to own before they sold it off earlier in the year), and all data providers are free to slice the data how they see fit based on what data they receive from the managers or intermediaries and what buckets they use to throw different holdings into.

Generally you get better data about an individual fund if you look at what's published by the manager themselves (e.g. the manager's own factsheet mentioned by Moe) although this can make it difficult to compare on the exact same basis across funds who might classify things a bit differently in terms of category names or methodologies, while if you try to standardise across funds through a middleman data provider you will end up with a bunch of 'other' or 'unclassified'.

In the case of Gravis Clean Energy they are a fund-of-funds with a variety of investments into investment trusts and investment portfolio holding companies and some of those entities will likely be domiciled in e.g. Channel Islands or Cayman (which are not UK, EU or US) or have a country of stock exchange listing which is not the same as the country of much of their underlying investee holdings meaning that an assessment of where your money has gone isn't easy to determine from the top level data aggregated by a data provider.

For example, the HL factsheet says 55% of your money is in "Equity Investment Instruments" or "Real Estate Investment Trusts", which is the kind of thing that would make one think: "no sht Sherlock, I know it's investing into other funds but you haven't answered my question on what sector I'm exposed to..."; you get more of an insight if you arm yourself with the reports and factsheets of the key investee fund holdings (whose names you would see in the Gravis fund manager's factsheets or reports).

Dandytf

@bowlhead99
Thanks for detailed Locations List and explanation.
The HL list was From their Top 10 Countries.
Non-Classified50.85%- This was my slight concern, which you have since explained,
Canada15.13%United States11.49%United Kingdom7.94%Cash and Equiv.7.39%New Zealand2.51%Ireland2.19%Germany1.82%Sweden0.68%
I've a day or two, though seems very interesting Fund, which I intend to setup small monthly DD.

Thanks!