How Can Investors Enjoy Diversification Benefits From Energy Investments

1. Distributed Energy - What Is Strategic Asset Allocation? August 2020

2. Distributed Energy Overview Distributed Energy is a development and aggregation platform that connects solar and other renewable energy projects with funders. We accelerate the deployment of renewable energy across the developing world.

3. What Is Strategic Asset Allocation? • An important decision you will make in your career is how you will plan financial security, not just in the short-term, but also for retirement. One way to achieve this is through seeking financial services such as portfolio management. • Portfolio management, in a nutshell, is all about matching investments to objectives and allocating assets for individuals based on risk versus performance. One way to achieve a successful portfolio is through strategic asset allocation. • A strategic asset allocation is a portfolio strategy that aims to invest in different asset classes that help in balancing the risk and returns in a portfolio. This is normally done by taking into consideration the investors goals, risk tolerance and investment horizon. • By understanding and using this balanced approach, you as an investor can improve your returns and create a more efficient portfolio. The diagram below summarizes the strategic asset allocation process.

4. Diversification Benefits • Strategic asset allocation involves dividing an investment portfolio among different asset classes. However, as mentioned earlier, the process of determining the mix or the ratio of the asset categories is dependent on your financial goals, the amount of risk you are willing to tolerate and the time frame. For example, o­ver the last decade, renewable energy has become an increasingly popular investable asset class. • Strategic asset allocation range between 3% and 10% of total assets under management to the field of infrastructure, and energy infrastructure typically makes sense. Social impact investing is considered as a non-traditional asset class. This makes it a fantastic option to diversify your asset allocation and potentially fill a gap in your portfolio. Allocation to this asset class has traditionally been accessible only to the institutional market and not to broader wholesale and sophisticated investors. However, this trend is changing rapidly as more companies, such as Distributed Energy, have entered the market. • As sustainable energy aggregators, they have an online platform that connects impact investing projects in India, East Africa and the Middle East with investors. They offer managed portfolio services in private renewable energy investments. Investors can benefit from automatic diversification, reduced minimums and dependable cash flows over the long-term. Such assets are designed to perform in a stable and predictable manner because the revenues are driven by fixed long-term contracts and require little on-going operational expenses. The table to the right summarizes how investments in energy infrastructure fulfills investment portfolio requirements.

5. In Summary • Diversification is prudent when building resilient portfolios. An allocation to renewable infrastructure can act as a ballast within a traditional portfolio of equities and bonds and will be equally appealing when blended with other asset classes to enhance portfolio outcomes. This can be especially useful in periods of sustained volatility, notably the current COVID-19 situation. • This market offers great long-term opportunities for investors because the competitiveness of renewables is being continuously increased through economies of scale, technological advances and cost savings through the value chain.

6. Thank You August 2020 Get in Touch : info@de.energy or visit www.de.energy