Performance at Month End

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 October 2008 (unless otherwise stated) and
unaudited.

DATA AND PERFORMANCE


  Data                            Pricing and Performance
                                                       IEM     FTSE
                                                       Net    Global
  Share price                                         Asset  All Cap
(pence)                     83.38                     Value
  Warrants (pence)       GBP 27.0
  Total fund size       GBP 271.0        Diluted NAV  88.59    n/a
(m)                                          (pence)
  Market                GBP 254.6   Premium/discount   0.0
capitalisation (m)                               (%)
  Management fee (%)          1.0      Undiluted NAV  88.59
                                             (pence)
  Established         22 February       Performance*
                             2002
  Fund structure       Investment        1 month (%)  -20.5   -12.3
                            Trust
  Number of holdings           91       3 months (%)  -27.4   -16.9

  (including
unlisted)
  Exchange                 London         1 year (%)  -33.2   -29.7
  Currency                    GBP        3 years (%)  +1.7    -11.0
  ISIN number        GB0031232498        5 years (%)  +31.5    +8.6
  Sedol                   3123249
  Reuters RIC code          IEM.L * Performance data is for undiluted
                                  NAV.
  Bloomberg code           IEM LN


TOP TEN HOLDINGS


Company       Holding %   Description                     Country
Clean Harbors       3.4   Hazardous waste                 US
Clarcor             2.7   Air filtration                  US
Pentair             2.6   Water treatment                 US
Regal Beloit        2.6   High efficiency electric motors US
Pall Corp           2.5   Filtration                      US
Stericycle          2.5   Hospital waste treatment        US
Covanta             2.3   Waste to energy incineration    US
Kurita              2.1   Water treatment & desalination  Japan
Vacon                 2   Frequency converters            Finland
Ormat                 2   Geothermal                      Israel/US
TOTAL              24.7



PORTFOLIO ANALYSIS*



  Geographical           Company Size
  US and Canada      41% >$2bn        12%
  EU and EFTA        43% $200-2bn     72%
  Rest of the World  12% <$200m       12%
  Cash               4%  Cash         4%

  Sectoral               PE ratios
  Energy             37% PER >20x     11%
  Water              28% PER  15-20x  11%
  Waste              31% PER <15x     72%
Cash                 4%  Unprofitable 2%
                         Cash         4%
* of funds invested as of 31 October 2008

IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (October 2008)


During another extremely volatile month, amid large falls in global
equity markets the Company NAV decreased by 20.5% compared to the
FTSE Global All Cap which decreased by 12.3%. This underperformance
can partly be explained by weakness in renewable energy related
stocks that de-rated during the period. However, it also reflects the
intrinsic nature of an Environmental Markets portfolio that has an
overweight position to stocks classified as basic materials and
industrials which were weak during the period, and zero exposure to
healthcare and consumer staples which were strong during the period.

In environmental policy news, the European Parliament's Environment
Committee voted in favour of three separate reports on emissions
trading, greenhouse gas reduction efforts and carbon capture and
storage. The package is now subject to negotiation and approval by
the Council of Ministers and the full Parliament before entering into
law in 2009. Attempts by Italy and Poland to water down the proposals
in order to protect domestic industries remain potential hurdles to
adoption. However, French President Sarkozy remains committed to the
pledges and determined to broker an agreement by the end of the year.
Also in the EU, ministers decided to go ahead with a ban on
incandescent light bulbs, to be phased in from 2010, and a committee
of member states approved new eco-design rules setting efficiency
standards for external power supplies, such as chargers for mobile
phones. In Japan a voluntary carbon market based on companies'
pledged emissions cuts was launched, to begin trading in December. In
the Water Treatment & Pollution Control sector, the International
Desalination Association announced that global contracted
desalination capacity grew by 43% in 2007. In the Waste Technologies
& Resource Management sector, the Recycling Investment Saves Energy
Act was included in the US economic stabilisation package, providing
tax breaks for businesses to buy recycling equipment.

Alternative Energy & Energy Efficiency underperformed as a number of
companies in certain key energy sectors (e.g. wind turbine
manufacturers and automated meter providers) de-rated. Companies that
negatively contributed to performance were Vestas, Gamesa, and Itron
as investors became more cautious on growth prospects for the
underlying markets. Epistar (LEDs, Taiwan) and Miura (energy
efficiency, Japan) were relatively resilient following above
expectation Q3 results. In contrast, the Water Treatment & Pollution
Control sector outperformed during the month. Best performers were
Clarcor (filtration, US) which continued to show resilience in
challenging markets and Kurita Water (water treatment, Japan),
recovering from a difficult previous quarter. In the Waste
Technologies & Resource Management sector Clean Harbors (hazardous
waste management, US), Stericycle (clinical waste management, US) and
Tomra (reverse vending machines, Norway) continued to benefit from
strong earnings visibility and the long term, non-cyclical nature of
their waste contracts. Meanwhile companies with high levels of debt
such as Transpacific Industries (waste management, Australia) have
de-rated on perceived refinancing risk.



Latest information available at:


http://www.impax.co.uk/impax/funds/listed_funds/environmental_plc/

18 November 2008

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