Analysis of Polar Capital Smart Energy Fund
1 JUN, 2026
The energy sector is currently undergoing a massive structural shift, which the Polar Capital Sustainable Thematic Equity team refer to as the "electricity megacycle". The global economy is moving towards decarbonization and electrification, a transition fuelled by governmental frameworks targeting carbon neutrality and energy independence, creating a multi-decade investment theme.
For investors, this environment demands a focus on the solution providers that enable this smart, secure and sustainable future.
The Polar Capital Smart Energy Fund is designed to capitalize on this shift by investing in companies across the entire energy value chain, from clean power generation to energy efficiency. Launched in September 2021, the Fund is an Article 9 product under the EU’s SFDR, meaning sustainability is central to both its investment thesis and its outcomes.
The Fund is constructed to focus on solution providers. Many of our holdings benefit from electrification, efficiency and infrastructure investment regardless of the precise pace or direction of individual policy measures. This is especially evident with the recent surge in demand driven by AI data centres.
Thiemo Lang, PhD, Senior Portfolio Manager
Characteristics
- Investment strategy: The Fund is actively managed and employs a high-conviction approach, targeting a highly diversified portfolio of companies positioned to benefit from the energy transition. The investment process is primarily driven by fundamental, bottom-up stock selection, supported by a thematic view of the "Smart Energy" universe. The strategy focuses on four key investment clusters:
- Clean power generation: Companies developing low-carbon, renewable energy sources like wind and solar power, as well as renewable power producers
- Energy transmission and distribution: Infrastructure equipment suppliers and microgrid developers that modernise and expand the electricity grid
- Energy conversion and storage: Suppliers of energy storage systems to secure grid stability as well as power semiconductors that reduce energy conversion losses
- Energy efficiency: Solution providers accelerating efficiency and electrification across buildings, data centres, transport and industrial markets
- Benchmark: The Fund uses the MSCI ACWI Net TR Index as its external benchmark. As the Fund is actively managed and unconstrained, its holdings and weightings may differ materially from the benchmark, as evidenced by a current active share of 96.46%.
- Manager: The Fund is managed by Polar Capital, a specialist active investment manager established in 2001 that prioritizes fund performance over asset gathering. The firm operates a boutique model where autonomous investment teams, like the Sustainable Thematic Equity team, are supported by a centralized operational infrastructure.
- Investment team: Based in Zurich, the Sustainable Thematic Equity Team was established in 2021 and is led by Senior Portfolio Manager Thiemo Lang, PhD who previously led thematic energy and mobility strategies at Robeco. He is supported by a team of seasoned analysts with deep expertise in sectors such as semiconductors, renewables, and mobility.
- Assets: The Polar Capital Smart Energy Fund, as part of the broader strategy that includes a Smart Mobility fund and managed accounts, oversees approximately USD 768 million in assets under management as of April 30, 2026.
A leading performance record
Performance has been a recent standout feature for the Fund. As of April 30, 2026, the Fund has delivered a year-to-date return of 49.74%, significantly outperforming its benchmark, the MSCI ACWI, which returned 6.65% over the same period. Over the 12 months ending April 30, 2026, the
Fund has returned 133.57%, compared to 31.00% for its benchmark.
Source: Polar Capital and Northern Trust International Fund Administration Service (Ireland) LTD, as of 30 April 2026. Performance figures represent the USD I Acc Share Class, launched on 30 September 2021. Fund and Benchmark performance data is shown in USD. If this is not your local currency, exchange rate fluctuations may cause performance to increase or decrease when converted into your local currency. Performance data takes account of fees paid by the fund but does not take account of any commissions or costs you may pay to third parties when subscribing for or redeeming shares or any taxes or securities account charges that you may pay on your investment in the fund. Such charges will reduce the performance of your investment. A 5% subscription fee can be charged at the Investment Managers discretion.
Portfolio Top 10 Holdings
| Equity Name | Weight | Cluster | Sub-cluster | Sector | Country | Currency | Market Cap (USD M) |
| Coherent | 6.64% | Energy Efficiency | Big data | Information Technology | US | USD | 59,940 |
| Lumentum Holdings | 6.64% | Energy Efficiency | Big data | Information Technology | US | USD | 64,426 |
| Marvell Technology | 6.56% | Energy Efficiency | Big data | Information Technology | US | USD | 144,391 |
| Analog Devices | 4.31% | Energy Conversion & Storage | Power conversion | Information Technology | US | USD | 196,385 |
| Renesas Electronics Corp | 3.65% | Energy Conversion & Storage | Power conversion | Information Technology | JP | JPY | 38,373 |
| Delta Electronics | 3.20% | Energy Efficiency | Industrial Processes | Information Technology | TW | TWD | 177,610 |
| Hydro One | 3.06% | Energy Transmission & Distribution | Electric grid and hydrogen distribution | Utilities | CA | CAD | 25,715 |
| Siemens Energy AG | 3.01% | Energy Transmission & Distribution | Smart grid equipment | Industrials | DE | EUR | 181,913 |
| LG Energy Solution | 2.84% | Energy Conversion & Storage | Energy Storage | Industrials | KR | KRW | 73,332 |
| STMicroelectronics NV | 2.73% | Energy Conversion & Storage | Power conversion | Information Technology | CH | EUR | 49,170 |
The path to decarbonization
The managers believe the energy transition towards electrification is in "acceleration mode". 65% of new electricity demand by 2050 is expected to be from more emergent technologies like humanoid robots and heat pumps, as well as the continued build out of data centres.
Key areas of focus for the portfolio include:
- AI Data Centers: Providing solutions to manage the surge in power demand from hyperscalers, where capex is expected to rise above $1 trillion by 2027.
- Energy Conversion Semiconductors: Investing in key components that enable efficient electrification.
- Grid Infrastructure: Capitalizing on the return to growth of grid investments including battery storage and renewable integration.
- Physical AI: Optimizing efficiencies for the next generation of energy-intensive machines, including autonomous vehicles, humanoid robots and drones.
Regardless of the shorter-term drivers, electrification is a long-term theme. The Polar Capital Sustainable Thematic team project that electricity’s share of global energy consumption will rise to 60% by 2050 from the 20% it is currently.
Additionally, carbon-free power is projected to grow sixfold, rising from 36% in 2020 to 90% by 2050.
statistics-2020/final-consumption for historical figures (until 2020); BNEF for historical figures.
Summary
With a seasoned team, a rigorous sustainability framework, and a proven track record, the Polar Capital Smart Energy Fund offers investors focused exposure to the leading companies shaping a decarbonized energy future and is well positioned to capitalise on the global electrification boom.
