WHEB Sustainable Impact Fund

Investing in industries of the future, solving sustainability challenges for the world

August 2023 - Monthly REPORT

Putting the backbone into a renewable energy future


Market volatility increased in August following weak macroeconomic data out of China, renewed stress in the Chinese property market, and an increase in sovereign bond yields.  For the month overall the MSCI World Index rose +1.6% on the back of a depreciating AUD. The Fund underperformed as a result of the continued performance of non-impactful stocks and large-cap stocks.

In this month’s commentary, Victoria MacLean (Associate Portfolio Manager) discusses whether our infrastructure can cope with renewable energy and electrification, which together can deliver 75% of the energy-related CO2 emissions reductions needed to keep global temperature increases “well below” 2°C.


Top Holdings (alphabetically)

Agilent Technologies Inc
United States
Health Care
Agilent Technologies is a specialist in the development and manufacture of bio-analytics for the life sciences and chemical analysis industries. The mission of the company is to advance quality of life. Within healthcare, its analytical instruments are used in the development and testing of healthcare products. Agilent also has a chemical analysis business which makes equipment for monitoring levels of pollutants in the ambient environment and or measuring contaminants in food and the human body.
Autodesk Inc
United States
Information Technology
Autodesk is a global leader in 3D design and engineering software and services. Its products are used by architects, engineers and designers to design, develop and manufacture and operate a vast range of products, buildings and services. Autodesk tools are a critical component in the design and operation of more resource efficient products and buildings. They can deliver significant resource savings, due to their impressive capabilities and critical position in design process. The product brands include Autodesk 360 cloud services, AutoCAD civil 3D and LT, 3Ds Max, Maya, and Revit.
Health Care
CSL develops medical products for serious and life-threatening diseases. Its core business is as a provider of human blood plasma-derived products to treat bleeding disorders, rare and serious infections and autoimmune diseases. CSL also manufactures vaccines and related products, including for flu and cervical cancer, as well as other products that speed up recovery times for patients that have undergone heart surgery, organ transplants and burns. The company provides these solutions across North America, Europe, Asia, Australia as well as other parts of the world.
Danaher Corp
United States
Health Care
Danaher is a diversified business that designs, manufactures and sells laboratory equipment and consumables to clinical and medical laboratories including microscopes, analytical software and imaging and molecular devices. These tools are used in the development of new drugs and for diagnosing critically ill patients. In addition, the company also designs, manufactures and sells equipment to test and treat water (incl. UV water treatment systems). Overall, The products of the company offer improved efficiency and reliability.
United States
Health Care
ICON is a clinical research organisation (CRO) which provides outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. The mission of the company is to accelerate the development of drugs and devices that save lives and improve the quality of life. ICON specialises in the strategic development, management and analysis of programmes to support all stages of the of the clinical development process.
Linde PLC
United States
Linde Plc produces and distributes industrial gases. The company operates globally supplying oxygen, hydrogen and other gases to a very wide range of downstream markets including into manufacturing industries, petrochemical and electronics industries. The gases are used in a variety of applications including in making manufacturing processes more efficient and in reducing harmful emissions. The company is establishing a strong presence in the green hydrogen market and also sells oxygen and other gases into the healthcare sector.
MSA Safety Inc
United States
Founded in Pittsburgh in 1914, MSA originally stood for Mine Safety Appliances. This was changed in 2014 to MSA Safety to reflect the broader range of products the company has developed. Today, MSA still manufactures products such as fixed gas and flame detection systems which are used across industry. They are also a leading manufacturer of self-contained breathing apparatus and fire helmets for firefighters as well as fall protection equipment for working at height.
United States
Health Care
Steris provides a variety of products and services to the healthcare industry including specifically to hospitals, medical device manufacturers, pharmaceutical and biotechnology businesses as well as for food safety and industrial markets. The main areas of activity are in providing hygiene, sterilisation and anti-microbial treatment services to these end markets in order to ensure a safe and hygienic operating environment.
Thermo Fisher Scientific Inc
United States
Health Care
Thermo Fisher Scientific is one of the largest suppliers of analytical instrument, equipment, consumables and software for healthcare and environmental research, analysis, discovery and diagnostics. The company offers a very wide range of products and services including the equipment needed to analyse samples as well as the variety of containers and other consumables needed to handle them.
Trane Technologies PLC
United States
Trane is a world leader in air conditioning systems and services. The company serves engineers, contractors and business owners across an array of markets including education, healthcare, government and manufacturing. It also provides climate-controlled transport solutions to the food and medical industries. It also has an offering in the heat pump space which brings a 300% efficiency gain compared with the system it would replace.

Sector Breakdown

Capitalisation Breakdown

Region Breakdown

WHEB Sustainability Themes


Performance Table

WHEB Sustainable Impact Fund -0.3% 15.5% 5.8% 5.5%
Strategy (partial simulation – see below) 6.0%
MSCI World Total Return Index (net, AUD unhedged) 1.6% 22.4% 13.3% 10.7% 7.3%

Swipe horizontally to see all columns

Fund & Strategy Performance


Market Review

Market volatility increased in August following weak macroeconomic data out of China, renewed stress in the Chinese property market, and an increase in sovereign bond yields.  For the month overall the MSCI World Index rose +1.6% on the back of a depreciating AUD.

Global inflation continued on its unsteady path downwards.  In the Eurozone, core inflation fell modestly although it remains above the ECB’s target and markets continue to price in further ECB rate increases before the end of the year.  In the US, Fed chair Jerome Powell promised ongoing vigilance in a Jackson Hole speech that was well received by financial markets.

UK inflation is on track to halve by the end of the year but is likely to remain high in the medium term. The Bank of England hiked its policy rate by 25bps at the start of August to bring the banking rate to 5.25%.

With war still raging in Ukraine, European natural gas prices increased by 23% in August on the prospect of a possible strike at three liquefied natural gas (LNG) plants in Australia. This is despite the EU reaching its gas storage target well ahead of the 1 November deadline and may signal further pressures ahead.

In Japan, the economy expanded by 6% quarter-on-quarter in the second quarter of 2023 on the back of the strong contribution of net trade. Japanese equities remained resilient over the month and continued their strong run this year.

In terms of industry sectors, Energy (which our investment strategy is not exposed to) and Healthcare were the best performers while Utilities and Materials were the weakest.

Fund Review

The outperformance of Energy and other non-impactful sectors, coupled with a structural exposure to mid-sized companies were significant performance headwinds and the Fund delivered a negative monthly return of -0.3%.

Safety was the strongest theme during the month and the largest contributor to performance, while Cleaner Energy was the weakest.

MSA Safety, Hello Fresh, and Autodesk were the strongest performing stocks. MSA Safety’s results beat expectations with strong organic revenue growth and an increase in margins. The company also raised its guidance for the full year.  Autodesk also reported ahead of expectations, and HelloFresh bucked negative sentiment to report results that were in line with a positive pre-announcement and re-iterate full year guidance.

SolarEdge, Infineon, and Power Integrations were the largest detractors from return. SolarEdge suffered negative momentum as the US residential solar market navigates the headwinds of higher interest rates.  Infineon and Power Integrations struggled as expectations of a weakening semiconductor market grew, along with weaker Chinese export growth.


Sentiment around global equities remains finely balanced.  Expectations are for a further economic slowdown, and the debate is around its pace and duration.  Markets also expect further rate increases before the current tightening phase ends.

While there is uncertainty in the short term, we remain confident in the long-term positioning of our holdings. We continue to have conviction that the sustainable-led growth drivers and competitive advantages of the companies we invest in put the portfolio in a good position to deliver outperformance.

Putting the backbone into a renewable energy future

Renewable energy and electrification can deliver 75% of the energy-related CO2 emissions reductions needed to keep global temperature increases “well below” 2°C.1 The question is: can the infrastructure cope?

Wind and solar energy sources are both variable and decentralised. In contrast, the existing electricity network was designed around very stable and centralised power generation sources. As a result, innovation and investment are needed to modernise the grid to support a growing share of renewables.

Figure 1: Power generation (PWh) needs to triple, with a significant shift to renewables by 2050.2

Alongside this challenge, end-use electrification (transport and heating for example) also increases the demand burden, meaning grid expansion will also be necessary alongside modernisation. On the positive side, increased deployment of digitalisation and “smart technology” can enable more flexible demand. For example, smart meters can signal to consumers when it’s cheapest to use electricity.

We think these challenges are underestimated, but we also see opportunities that are under-appreciated.

When does the sun shine?

Peak solar production typically occurs around midday. But when do the lights get turned on? Demand for electricity peaks just as the sun goes down. The diagram below illustrates this mismatch between supply and demand. Known as the ‘duck curve’, the mismatch grows as we use more solar energy.

Figure 2: The solar power ‘duck curve’.3

But these fluctuations aren’t just daily. Seasons cause mismatches across months; weather patterns like El Nino across years; and major weather events can create sudden, short-term changes. All of these factors are also becoming increasingly unpredictable due to the effects of climate change.

The variability in power generation creates significant challenges for the grid. The diagram below gives an indication of some of the technology that can support a more flexible grid.

Figure 3: Smarter electricity systems.4

At WHEB, we are already investing in some of the solutions. The examples you can find in our portfolios include smart grid technology, battery storage solutions, Electric Vehicle (EV) charging, and semiconductor technology that enables communication between the different parts of the system.

What makes a grid smart?

A smart grid is all about information and control. It is fitted with information and communications technologies (ICTs) to enable a real-time, two-way communication between suppliers and consumers. This creates a more dynamic interaction in energy flow, which helps to deliver electricity more efficiently and sustainably. According to the International Energy Agency (IEA), investment in smart grids needs to double by 2030 to get on track with Net Zero Emissions by 2050.5

Not a case of plug and play

But doubling investment in grid infrastructure isn’t easy. It’s an area that is heavily influenced by policy and regulation. Planning and approval can take years, delays are common and it’s not an industry known for its innovative flair.

Grids globally are already struggling to cope with the addition of renewable power. In the UK, projects are being connected to the grid on average four years after the date requested.6 In the US, fewer than one in five solar and wind proposals actually make it through the interconnection queue as developers eventually just give up.7

How is WHEB positioned?

In the WHEB global strategy, we invest in several companies with exposure to smart grid technologies. Silicon Labs is a leading supplier of semiconductor technology that enables wireless communication and the Internet of Things.

Figure 4: Silicon Labs and the internet of things (IoT).8

The connectivity they provide in smart meters, EV chargers, and solar panels is a key enabler of communication with the grid. That in turn enables better visibility, and potentially management, of end-demand.

Other examples include Infineon, which makes power semiconductors designed for flexible grid transmission and high voltage power transmission. TE Connectivity, a world leader in connectivity and sensors, also recently acquired a German company leading in power grid monitoring, protection, and automation systems.

The role of storage

The grid is becoming more complicated. As well as utility-scale power there will be new small-scale and local renewable sources including residential solar. Battery storage and EVs are also now being designed to work in reverse as a source of supply, as well as being a user of electricity from the grid.

Storage solutions play a crucial role in flexibility. Industrial-scale storage technology serves multiple purposes. It can provide backup and temporary power but can also be used for load balancing. This is the process of matching peak demand with additional sources of supply, or peak supply with storage.

The same is true of residential storage. SolarEdge is seeing strong growth in its storage solutions, which connect to its solar panel technology and smart energy ecosystem within the home. That in turn connects with utilities and the wider grid to allow for better visibility and control across the system.

Figure 5: SolarEdge products in residential homes.9

Making grids a strategic priority

The technology solutions to the challenges the grid faces already exist. The task now is to integrate them into existing infrastructure and accelerate the planning and delivery of grid expansion. That will require political will and significant spending, which is not easy in the current environment.

This is particularly pertinent as increasing investment could end up being passed on to consumers through electricity bills if policy makers don’t adopt the traditional mechanism for adding grid investment costs to the price of electricity. Solving the grid challenge will undoubtedly have societal benefits, but it is important to consider the immediate costs and ensure the burden is distributed fairly.


1 IRENA, “Global Energy Transformation: a Roadmap to 2050” 
2 Ibid
3 Visual Capitalist, The Solar Power Duck Curve Explained
4 International Energy Agency, Technology Roadmap: Smart Grids
5 IEA, Smart Grids
6 The Economist, Adding capacity to the electricity grid is not a simple task
7 New York Times, The US has billions for wind and solar projects. Good luck plugging them in
8 Silicon Lab Investor Day 2022
9 SolarEdge Technologies, Investor Presentation





  • FEES * Management Fee: 1.35%
  • Minimum initial investment $10,000
  • FUM AT MONTH END A$ 273.31m
  • FUND INCEPTION DATE 31 October 2007

Fund Managers

Ted Franks

Partner, Head of Investment

Seb Beloe

Partner, Head of 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.’


Harding Loevner International Fund
Harding Loevner International Fund
Axiom International Ethical Fund
Axiom International Ethical Fund
Axiom International Ethical Fund (Hedged)
Axiom International Ethical Fund (Hedged)
Australian Equities Fund
Australian Equities Fund
High Conviction Property Securities Fund
High Conviction Property Securities Fund
Global Small Companies Fund
Global Small Companies Fund
WHEB Sustainable Impact Fund
WHEB Sustainable Impact Fund
Emerging Companies Fund
Emerging Companies Fund
High Conviction Equities Fund
High Conviction Equities Fund
Pengana International Equities Limited (ASX: PIA)
Pengana International Equities Limited (ASX: PIA)
Private Equity Trust (ASX: PE1)
Private Equity Trust (ASX: PE1)
Alpha Israel Fund
Alpha Israel Fund
Pengana Diversified Private Credit Fund
Pengana Diversified Private Credit Fund

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 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 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 zeroed. The Henderson Industries of the Future Fund’s and the FP WHEB Sustainability Fund’s GBP net track record data is historical. 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 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.