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OUR FUNDS

Energy is the most pressing issue of our time

Why invest in clean energy?

Disruption creates opportunity

  • Changes to 100-year norms in energy are underway
  • The combustion age is ending – the electric age has begun
  • Large-scale disruption represents an opportunity for significant investment returns

 

The problem and the solution

Today: The Combustion Age

  • Over 80% of energy from fossil fuels
  • Over 50% of primary energy lost in the process of combustion
  • Only one-third produces useful work or heat
  • Energy is three-quarters of global GHG emissions

 

Tomorrow: The Electric Age

  • Greater efficiency means only half as much primary energy required
  • The world needs 2.5x as much electricity and 250x as much energy storage
  • 20% less mineral extraction
  • More abundant, more secure energy at lower cost

What are the fundamentals?

Generational investment opportunities from extraordinary disruption

  • Governments, corporates and consumers are all driving change
  • Trillions of dollars of investment
  • Mass adoption of new technologies
  • Extraordinary industry growth rates
Growth by 2030 2050
Renewables 3-4x 7-8x
Electric vehicles 5-6x 8-10x
Batteries 15x 250x

Our energy vision

Invest in an extraordinary but inevitable change

  • More abundant, more secure energy at lower cost, will usher in a new era of prosperity and value creation
  • 3/4 of global GHG emissions come from energy – mass-adoption of new energy technology is changing the unsustainable 100-year norms
  • Extraordinary commitments from governments, corporates and communities to change, directing trillions of dollars of investment
  • Secular trend established with high growth rates in key industries (renewables, energy storage and electrification)
  • Opportunity to generate extraordinary investment returns and to support this vital but inevitable change

How do you invest in clean energy?

The addressable opportunity is in publicly-listed companies

Focus on the key industries

  • Renewable energy (e.g. solar, wind – generation of zero-emission electricity and heat)
  • Energy storage (batteries and hydrogen)
  • Electrification (e.g. electric vehicles, heat pumps – devices and equipment which consume electricity rather than hydrocarbons)

Invest in a portfolio of companies

Active research and management are the critical ingredients

Focus on four key attributes

  • World leaders in key industry segments (via innovation and market share)
  • Attractive fundamentals (high growth, high margins, low capital intensity)
  • Staying power (strong, net cash balance sheets)
  • Competitive advantage (through technology, scale, or both)

Investment strategy

Specialised strategy for successful investment in clean energy

  • Actively managed global equities with a ‘growth’ style bias
  • High-conviction portfolio (30-40 positions), fully invested (<5% cash)
  • Bottom-up fundamental valuations
  • Highly-liquid exposures (no unlisted or illiquid positions)
  • Currency unhedged (unless individual currency risk exceeds defined limits)
  • Institutional approach to portfolio construction and risk management
  • Oversight and deep industry insights from globally recognised advisory board

Target returns and expected risk

Attractive, risk-balanced returns

  • Target returns 20-30%pa over a 3-5 year investment horizon
  • Volatility 25-35% (annualised)
  • Beta (to global equities) 0.8-1.5
  • Correlation (to global equities) 0.6-0.9 (r2)

Track record and risk metrics

Cumulative return since inception (A$, net of fees)

31 July 2019
31 August 2023

 

Past performance is not an indication of future performance.

1 The Clean Energy Index comprises equal weightings to the S&P Global Clean Energy and Wilderhill Clean Energy Net Total Return Indices
2 MSCI World Net Total Return Index

Performance and Risk (A$, as of 31 August 2023)
T8 Energy Vision Clean Energy Index1 MSCI World2
Returns
3 months -3.9% -5.8% 7.1%
6 months -8.9% -11.0% 16.3%
12 months -15.2% -25.7% 24.0%
Year to date -0.7% -6.2% 23.0%
Since inception 104.7% 62.8% 61.4%
Risk (last 12 months)
Volatility 24% 23% 12%
Sharpe ratio -0.6 -1.1 2.0
Equity Correlation 0.6 0.6 1.0
Equity Beta 1.2 1.1 1.0
Up-capture 110% 82% 100%
Down-capture 235% 248% 100%
Up/Down Capture Ratio 0.5 0.3 1.0

 

Important notice

Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298, AFSL 240975) is the Responsible Entity for T8 Energy Vision. Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT).

This material has been prepared by Triple Eight Capital Pty Ltd (“T8”) (ABN 52 642 108 496, AFSL 527866) to provide general information only. In preparing this material, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither T8, Equity Trustees nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.

T8 Energy Vision’s Target Market Determination is available here. A Target Market Determination is a document which describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.

Interested in T8 Energy Vision?

How to invest

Why invest in gold?

Gold is an essential asset class and its production is associated with considerable socio-economic contribution

  • Gold bullion has been the best performing asset class of the last 20-years (an achievement we expect it to repeat over the next 10 to 20-years)
  • Gold is the only truly ‘precious metal’ (despite silver and the platinum group of metals all being considered ‘precious metals’). The absence of industrial uses is gold’s key differentiator (industrial applications accounts for c.67% and c.65% of platinum and silver demand respectively, relative to gold at less than 10%)
  • This makes gold bullion a currency which is held and traded (rather than a metal which is used or consumed)

  • Gold bullion is the only asset with genuine intrinsic value (i.e. its value is not predicated on future cashflows or commitment and is materially supported by its replacement cost which increases structurally over time and with inflation) and comparable liquidity to cash, even in times of crisis
  • Gold is also geopolitically neutral
  • These characteristics make it a ‘store of value’ and see it playing the role of ballast in our financial system
  • The larger the financial system grows, the more ballast is required

Why do we need to mine more gold?

The gold industry’s socio-economic contribution is unrivalled

  • The new mines are increasingly situated in the less developed world
  • The typical challenges in these regions are: low life expectancy, limited education opportunities, poor employment prospects
  • Mining companies build infrastructure which begins to address these issues
  • Responsible gold producers support sustainable socio-economic development (through contribution to jobs, tax revenue and investment in local communities)

Why invest in gold producers?

Gold producers are naturally levered to the gold price

  • Gold producers provide leveraged exposure to gold bullion (target beta to gold bullion of 1.5-2.5) via producer operating margin and reserve ounces (i.e. if the gold bullion price moves by one unit, a basket of gold producers would be expected to move by two units)
  • Investing in responsible gold producers has the potential to generate investment returns and support support sustainable socio-economic development
  • We consider responsible gold producers to be those which conduct their gold mining operations with good governance as well as respect for the environment, human rights and the wellbeing of associated communities, employees and contractors

What are the fundamentals?

Robust demand from multiple sources combined with increasing supply constraints

  • Inflation remaining persistent is likely to be a major upward catalyst for gold (inflation remaining persistent would be only the third time this has happened in the last 50 years – the prior two occasions saw triple-digit percentage returns)
  • The two prior occasions saw gold rise by 320% (1972-74) and 160% (1979-80) and we see no reason to believe this time will be different
  • Gold allocation should be considered for all portfolios to hedge the risk that elevated inflation remains persistent

Our vision

Positive socio-economic outcomes can be achieved without sacrificing investment returns

  • Gold’s unique and attractive fundamentals make it a beneficial addition to any diversified investment portfolio
  • The naturally leveraged characteristic gold producers provide (relative to gold bullion) make it a superior choice in upward-trending markets
  • Investing in well-managed responsible gold producers supports sustainable socio-economic development while minimising detraction from environmental, social or governance factors
  • Exposure to gold producers with good governance as well as respect for the environment, human rights and the wellbeing of associated communities, employees and contractors does not detract from investment returns
  • Responsible gold producers have an overall lower fundamental risk profile

How do you invest in gold producers?

The addressable opportunity is in publicly-listed companies

Focus on the key industry segments

  • Major producers
  • Royalties and streaming
  • Senior mid-caps
  • Emerging mid-caps
  • Critical by-products

Invest in a portfolio of companies

Active research and management are the critical ingredients

Focus on two key attributes

  • Attractive fundamentals (production growth, high margins, stable costs, low capital intensity)
  • Staying power (strong balance sheets)

Investment strategy

Specialised strategy for successful investment in gold producers

  • Actively managed global equities
  • High-conviction portfolio (15-20 positions), fully invested (<5% cash)
  • Bottom-up fundamental valuations
  • Highly-liquid exposures (no unlisted or illiquid positions)
  • Currency unhedged (unless individual currency risk exceeds defined limits)
  • Institutional approach to portfolio construction and risk management
  • Oversight and deep industry insights from globally recognised advisory board

Target returns and expected risk

Attractive, risk-balanced returns

  • Target returns 20-30%pa over a 3-5 year investment horizon
  • Volatility 25-35% (annualised)
  • Beta (to gold bullion) 1.5-2.5
  • Correlation (to gold bullion) 0.6-0.9 (r2)

Track record and risk metrics

Cumulative return since inception (A$, net of fees)

31 July 2019
31 August 2023

 

Past performance is not an indication of future performance.

1 NYSE Arca Gold Miners Net Total Return Index (GDM Index)
2 Gold bullion as tracked by the SPDR Gold Shares (GLD US)

Performance and Risk (US$, as of 31 August 2023)
T8 Gold Gold Miners Index1 Gold bullion2
Returns
3 months -3.2% -4.4% -1.2%
6 months 10.4% 12.2% 11.1%
12 months 31.1% 33.8% 21.1%
Year to date 5.7% 8.2% 12.3%
Since inception 62.2% 25.2% 47.9%
Risk (last 12 months)
Volatility 32% 30% 12%
Sharpe ratio 1.0 1.1 1.8
Gold Correlation 0.8 0.8 1.0
Gold Beta 2.0 2.0 1.0
Up-capture 171% 173% 100%
Down-capture 202% 186% 100%
Up/Down Capture Ratio 0.8 1.0 1.0

 

Responsible gold production

References to responsible gold production refer to the term as defined by the World Gold Council, whereby responsible gold mining is conducted with good governance as well as respect for the environment, human rights and the wellbeing of employees, contractors and members of associated communities. These issues are addressed using the World Gold Council’s Responsible Gold Mining Principles which, together with the Mining Association of Canada’s Towards Sustainable Mining standard, set out frameworks and expectations as to what constitutes responsible gold mining. T8 has integrated these standards into its ESG assessment methodology. T8 believes that responsible gold production creates socio-economic benefits for host countries and associated local communities through job creation, tax revenue and community investment. Please email info@t8cap.com for more information.

 

Important notice

This material has been prepared by Triple Eight Capital Pty Ltd (“T8”) (ABN 52 642 108 496, AFSL 527866) to provide general information only. In preparing this material, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither T8 nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Private Offering Memorandum before making a decision about whether to invest in this product.

This material is for distribution only to sophisticated investors, financial institutions, financial services licensees and their advisers. It is not for viewing by retail clients or members of the general public.

Interested in T8 Gold?

How to invest