On February 19, Schroders Global Investments released a report forecasting that the basic profit outlook for energy transition stocks in 2024 will be stronger than in 2023. Although it is difficult to predict when the cyclical resistance that affected the industry last year will diminish, based on the analysis of the institution and discussions with companies and industry participants, industry profits are expected to improve between 2024 and 2025. According to Schroders Global Investments, energy transition stocks experienced a challenging third quarter but ended 2023 with a strong performance. Falling bond yields, loosening financial conditions, and the gradual shift of fundamental factors in key industries towards positive trends have contributed to boosting investment sentiment across the industry. While the improvement in performance at the end of last year was undoubtedly encouraging and highlighted the extreme valuations and investment sentiment in the industry, Schroders Global Investments remains cautious about short-term volatility due to ongoing risks related to inflation and interest rates. In fact, it was the sudden drop in bond yields at the end of last year followed by a recent rebound that caused energy transition stocks to have a disadvantageous start this year. Although interest rates and monetary policy may continue to play a key role in 2024, Schroders Global Investments believes that the true driving factor for higher returns in the future for energy transition stocks is the improvement in future profit growth prospects. Despite interest rates continuing to rise and fluctuate last year, the stability of profits and earnings exceeding expectations severely affected the performance of these types of stocks. Schroders Global Investments also emphasizes that there are still some risks to the profit outlook for energy transition stocks, especially as activity in the hydrogen sector slows down and renewable energy companies may be affected if supply chain disruptions continue. It may take some time for profits in other sub-industries to recover, especially if the macroeconomic situation deteriorates further. However, after a year of significant profit downgrades and further valuation declines, the outlook for energy transition stocks appears to be clearer. Schroders Global Investments states that in 2023, there were some political shifts in the energy transition sector, and political factors may have a more significant impact on the sector in 2024. The institution predicts that more than half of the global population will vote this year, with the November US election being crucial for energy transition stocks. If the Republican Party emerges victorious, support for the "Inflation Reduction Act" could be affected. Although the possibility of completely withdrawing support for the energy transition industry is small, major Republican candidate nominees have discussed abolishing certain aspects of related policies, making the risk of reduced policy support a real threat. Schroders Global Investments says that regardless of the final outcome, it can be expected that stocks that currently benefit the most from policies may experience fluctuations as the election approaches. In addition to the US, elections in countries such as India, Mexico, South Africa, the UK, and Belgium must also be closely monitored.