The sector makeup of our model-stock selection reveals high exposures to key climate transition sectors, including energy, utilities and industrials, and investors can therefore have a hand in supporting these sectors’ decarbonization efforts while protecting their portfolios against inflation. The selection includes renewables-oriented companies such as Equinor and Drax in energy and utilities, and industrials leading in carbon-cutting and net-zero plans including defense/aerospace firms Saab and Meggitt.
Notably, we find that the high-carbon materials sector as well as consumer discretionary are under-represented, at 4% and 1% of selected stocks, respectively, whereas these sectors each make up 10% of the universe. A list of 12 selected stocks with the highest inflation betas is linked with the exhibit.
Bloomberg
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