Monthly commentary - Mackenzie Greenchip Team

April 30, 2025

Portfolio Manager Monthly Insights

Key takeaways

Environmental indexes and the Greenchip strategy outperformed broader markets in April.

The Greenchip strategy had a very strong report from Siemens Energy, which gained more than 20% as the company continues to execute well in the face of secular growth in demand for electricity transmission and distribution equipment.

Similarly well-received earnings drove stocks in a diverse range of companies such as mining equipment provider Sandvik, Japanese battery and electronic components producer TDK, farm equipment concern AGCO, and power management semi-conductor leader ST Micro.

Macroeconomic recap

After beginning 2025 with three nervous months and fairly substantial losses in American stocks, asset markets took volatility up another notch in April. The month began with an already infamous ‘liberation day’, in which President Trump announced a broad swathe of elevated tariffs to be implemented across the entire world—including even unpopulated Pacific islands. What followed was an extension of what had come before, namely rapidly changing announcements—often on social media—dangling of upcoming deals, braggadocio and intimidation. While many tariffs were quickly reduced or even eliminated (e.g. auto parts from Canada and Mexico, smart phones from China), China remained the primary focus of Trump’s trade wars and showed little sign of bowing to American demands.

And yet somehow stocks managed another of their patented V-shaped recoveries. Despite the overhanging uncertainty affecting business confidence and economic outlooks, a few well-timed tariff climb-downs from Trump and—towards the end of the month—‘better-than-expected’ earnings releases from US consumer tech giants were enough to reverse the early double-digit drop. Nevertheless, the coast is far from clear. At the worst of the market swoon, both the US dollar and US bonds also took heavy losses. Unlike stocks, the US dollar did not recover by month end, while gold reached new record prices, reflecting an environment in which perceptions of US economic, cultural and political leadership have been seriously compromised.

Current positioning and Outlook

Environmental indexes and the Greenchip strategy outperformed broader markets. The FTSE Environmental Opportunities index that we track was buoyed by favourable market responses to earnings reports from Microsoft and Tesla, each up more than 5%, even though in the latter case earnings and outlook were significantly worse than expected. The Greenchip strategy had a very strong report from Siemens Energy, which gained more than 20% as the company continues to execute well in the face of secular growth in demand for electricity transmission and distribution equipment. Similarly well-received earnings drove stocks in a diverse range of companies such as mining equipment provider Sandvik, Japanese battery and electronic components producer TDK, farm equipment concern AGCO, and power management semi-conductor leader ST Micro. In the case of AGCO and ST Micro, while reports still showed significant declines in revenues and earnings, there were indications that excess inventories were nearly exhausted and signs of improvement in recently depressed end-market demand. With valuations on these companies very low, even this hint of a bottom was enough to drive double-digit gains.

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