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Questor is The Telegraph’s stockpicking column, helping you decode the markets and offering insights on where to invest
President Trump’s rallying call to the American oil and gas industry to “drill baby, drill” is a potent signal of his taste for fossil fuels. But will The Donald’s policies kill off green energy in the US, and wound it elsewhere?
Absolutely not, according to some of the world’s most successful investors, who continue to pour money into the renewables sector and companies that are actively helping the energy transition.
For these clean energy fans, the momentum behind the green transition is now unstoppable thanks to the increasing economic rationale for alternative energy sources compared with oil and gas.
Trump may find it extremely difficult to undo initiatives put in place by his predecessor, including the Inflation Reduction Act, a set of pro-green energy subsidies that have created jobs for millions of Americans, the majority of which reside in Republican states.
But the investment case for renewables is not just about pitting green energy against fossil fuels. After more or less flatlining for 25 years, the US is experiencing a surge in demand for electricity, driven by the revolution in artificial intelligence, and the hundreds of new data centres that are needed to feed its insatiable hunger for data.
The installation of charging infrastructure for electric cars is also playing its part.
Xavier Chollet, a top-performing senior portfolio manager at Pictet Asset Management, reckons that base electricity demand in the US and other developed economies will roughly quadruple in short order rather than gradually rise over decades.
This thinking forms part of the reason Chollet holds Iberdrola, the Spain-headquartered renewables developer and operator that has become a leading player in Europe, the UK and, indeed, the US.
Iberdrola’s Madrid-listed shares are available through the UK’s main stockbrokers, though buyers should ensure they fill in the forms minimising withholding tax and check with their provider for any additional dealing charges.
Chollet is one of 20 top-performing investors who back Iberdrola, each of them in the top 3pc of the more than 10,000 equity managers tracked by financial publisher Citywire.
Their conviction means Iberdrola ranks among top managers’ 100 favourite investments, from more than 6,000 companies held across their portfolios. It is AAA rated by Citywire Elite Companies, which assesses businesses based on smart-money ownership.
What is particularly compelling, Chollet said, is how the company’s management has led Iberdrola into renewables-related areas.