Monthly report – January 2025

Monthly fund update

Key points

• T8 Energy Vision ended January up 1.5% (in Australian dollars, hedged to the Australian dollar). In unhedged US dollar terms, this equates to up 2.1%, outperforming the fund’s benchmark (down 1.3%).

• Global equities rebounded after cooler than expected inflation data triggered a reversal in bond yields.

• T8 Energy Vision posted a positive return and outperformed its benchmark notwithstanding markets and future energy stocks being rattled by multiple left field factors (US presidential executive orders, DeepSeek and tariffs).

• The most important factor in energy markets at the present time is that for the first time in 20 years the US has increasing demand for electricity, driven by the boom in data centres.

• We have continued to upgrade our outlook for electricity demand growth following President Trump’s inauguration and notwithstanding the uncertainty created by DeepSeek, tariffs and some executive orders.

• We are very constructive on the fundamentals of the electricity generation industry as well as transmission and distribution grid infrastructure and all of the associated supply chains (from critical minerals, to transformers and cables, to the latest nuclear reactor technology).

• Falling interest rates (100 basis points of cuts so far) are yet to have a material impact on our focus area of the electric energy sector and its supply chains (which have historically displayed very high sensitivity to interest rates). We believe that this lag is explained by uncertainty following the US election and will prove temporary.