Global equities ended flat across November, with an initial market retreat led by the very large AI-related technology companies, followed by a bounce back as the US shutdown ended amid some good corporate earnings. The Fund rose +1.4% driven again by our Health theme.
Managing Director, Fund Manager
Managing Director, Head of Impact Research
The Pengana WHEB Sustainable Impact Fund invests in companies with activities providing solutions to sustainability challenges. WHEB have identified critical environmental and social challenges facing the global population over coming decades including a growing and ageing population, increasing resource scarcity, urbanisation and globalisation. The Fund invests in companies providing solutions to these sustainability challenges via nine sustainable investment themes – five of these are environmental (cleaner energy, environmental services, resource efficiency, sustainable transport and water management) and four are social (education, health, safety and well-being). WHEB’s mission is ‘to advance sustainability and create prosperity through positive impact investments.’
1. From August 2017, performance figures are those of the Pengana WHEB Sustainable Impact Fund’s class A units (net of fees and including reinvestment of distributions). The strategy’s AUD performance between January 2006 and July 2017 (shown in the shaded area in the chart) has been simulated by Pengana from the monthly net GBP returns of the Henderson Industries of the Future Fund (from 1 January 2006 to 31 December 2011) and the FP WHEB Sustainability Impact Fund (from 30 April 2012 to 31 July 2017). This was done by: 1) converting the GBP denominated net returns to AUD using FactSet’s month-end FX rates (London 4PM); 2) adding back the relevant fund’s monthly ongoing charge figure; then 3) deducting the Pengana WHEB Sustainable Impact Fund’s management fee of 1.35% p.a. The WHEB Listed Equity strategy did not operate between 1 January 2012 and 29 April 2012 – during this period returns are nulled. The Henderson Industries of the Future Fund’s and the FP WHEB Sustainability Impact Fund’s GBP net track record data is historical. Performance figures are calculated using net asset values after all fees and expenses, and assume reinvestment of distributions. No allowance has been made for buy/sell spreads. Please refer to the PDS for information regarding risks. Past performance is not a reliable indicator of future performance. The value of the investment can go up or down.
2. The Fund incepted on 31 October 2007 as the Hunter Hall Global Deep Green Trust. The Fund was relaunched on 1 August 2017 as the Pengana WHEB Sustainable Impact Fund employing the WHEB Listed Equity strategy. This strategy was first employed on 1 January 2006 by the Henderson Industries of the Future Fund and currently by the FP WHEB Sustainability Impact Fund.
3. Annualised standard deviation since inception.
4. Relative to MSCI World Total Return Index (net, AUD unhedged)
* For further information regarding fees please see the PDS available on our website.
COMMENTARY
Market Review
November was a volatile month for global equities. The first half of the month saw the market retreat, led by the very large technology companies, as investors began to question the growth potential of the artificial intelligence industry. The standoff over funding the US government, which stretched into its sixth week in the middle of the month, also hit sentiment.
However, the picture changed in the middle of the month. The shutdown ended on 12 November, and some good corporate earnings and hopes for a cut in US interest rates lifted markets later in the month. Overall, the MSCI World Index, representing the broad base of developed markets stocks, was flat (+0.1%) across November.
The key sustainability event of the month was the 30th Conference of the Parties (COP) in Belem, Brazil. This was widely regarded as a disappointing conference. The US boycotted the conference, and China played a relatively low-profile role, leaving two broad blocs in negotiations: Europe, and developing economies. Those two groups agreed some increases in the amount of finance for climate adaptation, but otherwise found it hard to reach common ground.
More disappointingly, the final text of the COP made no reference to fossil fuels, and the importance of phasing out their use. This led some commentators to question the value of the COP process. Our view is that it will remain an important forum, and could return to prominence, but that other bilateral and multilateral agreements will probably be a more significant component of climate action from now onwards.
Fund Review
The Fund rose +1.4% over the month, while broader equity markets were flat.
For the second successive month, the Health theme made the strongest positive contribution. Globus Medical was the standout performer, rising very strongly on results. These included surprisingly strong organic growth in Globus’ core musculoskeletal segment, but also very marked margin expansion, well above investor expectations. This excellent performance came in a year in which investors have doubted the company’s strategy, resulting in a sharp rise in its share price. Also in the Health theme, AstraZeneca continued its momentum from October. Good results for the third quarter of 2025 were complemented by positive updates on its key drug pipeline.
The Safety theme also contributed positively, led by sterilisation specialist Steris. Steris is currently overcoming investor fears that the company’s hospital businesses are perceived to be at a longer term risk from political changes to the number of Americans with healthcare coverage, and is enjoying strong organic growth, and using the cash flow to reduce its leverage.
The largest negative contribution came from the Resource Efficiency theme. There was no standout weak stock, but several of our companies that are exposed to industrial confidence, such as Keyence, Power Integrations, and Spirax Group, performed badly. Many of the earnings reports by these and similar companies pointed to the ongoing softness in industrial markets.
Outlook
At the end of last month, we identified a better-than-expected outcome from COP30 as a potential positive catalyst for the strategy. We didn’t get that, but good individual performance from our stocks, particularly in the Health theme, lifted the Fund. Despite the disappointing outcome from Belem, we detect that attitudes towards sustainability may, in any case, be improving again. The restrictive policy moves from the Trump administration have now largely played out, and the investment confidence required to drive a sustainable transition is slowly rebuilding.
Meanwhile, the overwhelming source of growth in broader equity markets of the last few years, artificial intelligence, is showing signs of reaching a cyclical peak. We believe that the comparative attractions of sustainability as a future driver of growth will become clearer in the months and years ahead.