Monthly report – April 2025

Monthly fund update

Key points

• T8 Energy Vision ended April down 1.4% (in Australian dollars, hedged to the Australian dollar). In unhedged US dollar terms, this equated to up 2.4%, outperforming its benchmark (+1.1%) and other reference indices such as US small caps (-2.4%), US equities (S&P 500 -0.8%) and global equities (+0.7%).

• T8 Energy Vision outperformed its benchmark and global equities in the extremely challenging market environment up to and following ‘Liberation Day’.
• Looking beyond the short-term noise around tariffs and trade wars, we have not changed our positive outlook for the electricity sector which is driven by structural, secular and cyclical tailwinds all converging. We believe this will allow it to prosper, even if the economy experiences a slowdown. We believe this period of market uncertainty represents a good entry point.
• US interest rates (which are presently in a cutting cycle) are yet to have a material impact on the electric energy sector and its supply chains. These sectors have historically benefited from interest rates. We believe that this dislocation is explained by recent policy uncertainty (especially up to and following the US election) which has polarised expectations in terms of the outlook for different forms of energy generation and temporarily obscured the impact of this positive cyclical catalyst.
• Booming electricity demand represents a compelling opportunity for investors. Driven by data centres (a secular electricity demand growth trend) and the electrification of road transport (a structural electricity demand shift), the winners will include energy generation, grid infrastructure, energy storage and electrification (as well as their direct supply chains, including critical minerals).