Navigating Volatility, Investing in the Future
Market Dynamics Amidst Geopolitical Unrest
The first quarter of 2026 witnessed considerable market instability, primarily due to an escalation of geopolitical tensions in the Middle East, leading to open conflict involving major global and regional powers. This volatile environment significantly influenced investor sentiment, prompting a reevaluation of traditional investment strategies and a pivot towards sectors offering stability and growth amidst uncertainty.
Nomura Climate Solutions Fund's Exceptional Performance
Despite the widespread market turbulence, the Nomura Climate Solutions Fund's Institutional Class shares delivered robust outperformance against its benchmark during Q1 2026. This notable achievement was largely attributed to the fund's superior sector allocation strategy, which effectively identified and invested in industries poised for growth in the evolving global landscape.
Darling Ingredients Inc.: A Leading Contributor
Among the fund's holdings, Darling Ingredients Inc. emerged as the top individual stock contributor for the quarter. Its strong performance underscored how the ongoing Middle East conflict, by disrupting established supply chains and energy markets, inadvertently created significant opportunities for companies involved in innovative, non-traditional energy and resource management sectors.
CF Industries Holdings Inc.: Benefiting from Market Shifts
Similarly, CF Industries Holdings Inc., a key player in the materials sector, was the second-best stock contributor to the fund's success. This company directly benefited from the ripple effects of the Middle East conflict, as global demand for materials and resources shifted in response to geopolitical realignments and the renewed emphasis on domestic production and supply chain security.
Strategic Positioning for Long-Term Trends
The Nomura Climate Solutions Fund remains strategically positioned to benefit from overarching structural changes, specifically energy independence, enhanced supply chain resilience, and decarbonization. The current geopolitical climate has only accelerated these trends, reinforcing the fund's investment philosophy that sustainable and climate-focused enterprises are not only environmentally responsible but also economically advantageous in a rapidly changing world.
