The Appeal of Global Impact Funds

In the world of financial investments, investors are often faced with the question of whether it is better to invest in individual shares or funds. Andres Gujan explains the role that factors such as diversification, risk/return ratio and personal preferences play in this decision.

Diversification and Risk: Individual shares are targeted investments in individual companies, which enables potentially higher returns. However, this is also associated with a higher risk, as the success of an individual share depends heavily on company-specific and market-related factors. Funds, on the other hand, spread the risk across a large number of shares or asset classes, which reduces the risk of loss. At Carnot Capital, we always keep an eye on these risk factors and periodically compare the portfolio with the ESG and impact values.

Risk-Return Profile: Individual shares can fluctuate strongly in the short term, but offer the opportunity for considerable gains in the long term. Funds offer a more stable performance over longer periods and are particularly suitable for investors who want to avoid large fluctuations in value.

Time and Costs: The selection and management of individual shares often required more time, knowledge and research. Professional fund managers, like us at Carnot Capital, deal with the portfolio on a daily basis, which reduces the effort for the investor.

Personal Preferences: The decision between individual shares and funds also depends on personal goals, risk tolerance and ethical considerations. Investors should design their investment strategy according to their individual situation and financial goals and draw on the expertise of specialised fund managers, especially for thematic investments.

“Overall, a balanced mix of individual shares and, for example, impact funds can be a sensible strategy to benefit from the advantages of both forms of investment, i.e. to achieve a good risk/return profile and make a sustainable contribution in the area of energy and resource efficiency. Andres Gujan, Founder Carnot Capital & Portfolio Manager

With spring’s arrival, not only does nature awaken, but so does our awareness of the planet. In April, environmental protection takes center stage, culminating in the international Earth Day on April 22. This year’s theme, “Our Power, Our Planet,” underscores the importance of sustainable resource management on a global scale. One approach gaining significance is impact investing, which strategically channels capital into companies that generate measurable positive effects on the environment and society. Our funds contribute by investing in energy- and resource-efficient technologies while delivering attractive returns.

Carnot Capital: Technology-Driven Sustainability

At Carnot Capital, we believe that technological innovation is the key to a sustainable future. Instead of advocating for sacrifice, we invest in companies whose products and technologies enhance energy and resource efficiency. With over CHF 250 million in assets under management and an annualized performance of over 6% since 2007, we successfully combine ecological responsibility with financial appeal.

Strategy and Target Sectors of Carnot Capital Funds

Our funds, particularly the Carnot Efficient Resources Fund, invest globally in publicly listed companies with resource-efficient technologies. Company selection is based on an attractiveness ranking, incorporating valuation and quality criteria. A key metric in our assessment is the Return on Capital Employed (ROCE). Our target sectors align with the four classical elements:

• Fire (Energy): Building technology, Industry 4.0, e-mobility, renewable energy
• Water: Drinking water treatment, wastewater purification, irrigation infrastructure
• Earth: Agriculture, food processing, raw material recycling
• Air: Emission control, low-emission fuels

Attractive Investment Opportunities

Focusing on companies with sustainable technologies not only creates ecological benefits but also opens up economic opportunities. Technologies that enhance energy and resource efficiency have excellent growth potential, as they provide solutions to pressing global challenges. Investors thus benefit from the combination of positive environmental impact and financial returns.

Conclusion

Earth Day on April 22 highlights the urgency of sustainable action. Impact investing, as practiced by Carnot Capital, demonstrates that investments in energy- and resource-efficient technologies can make a measurable contribution to global sustainability—without compromising on attractive returns. By supporting companies that develop innovative solutions to environmental challenges, investors actively contribute to a more sustainable future.

Andres Gujan, Founder of Carnot Capital & Impact Portfolio Manager, April 2025