Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 August 2009 (unless otherwise stated) and
unaudited.

DATA AND PERFORMANCE


  Data                                 Pricing and Performance
                                                          IEM   MSCI
                                                          Net   World
                                                         Asset  Small
  Share price (pence)            102.6                   Value  Cap*
  Warrants (pence)            GBP 14.5
  Total fund size (m)        GBP 347.2    Diluted NAV    112.77  n/a
                                            (pence)
  Market capitalisation      GBP 313.0  Premium/discount -9.84
(m)                                                  (%)
  Management fee (%)               1.0     Undiluted NAV 113.80
                                                 (pence)
  Established              22 February     Performance**
                                  2002
  Fund structure            Investment       1 month (%)  +4.6  +8.8
                                 Trust
  Number of holdings                89      3 months (%) +10.6  +15.9
  (including unlisted)
  Exchange                      London        1 year (%) -12.2  -3.4
  Currency                         GBP       3 years (%) +14.0  +1.1
  ISIN number             GB0031232498       5 years (%) +73.3  +42.3
  Sedol                        3123249
  Reuters RIC code              IMPX.L * Performance data is in Total
                                       Return.
                                       ** Performance data is for
                                       undiluted NAV.
  Bloomberg code                IEM LN























TOP TEN HOLDINGS


Company       Holding %   Description                  Country
Clean Harbors       2.3   Hazardous waste              US
Gamesa              2.3   Wind turbine manufacturer    Spain
Telvent             2.2   Utility software             Spain
Itron               2.2   Automated meter reading      US
Ormat               2.1   Geothermal                   Israel/US
Pentair             2.1   Water treatment              US
LKQ                 2.0   Recycled auto parts          US
Transpacific        2.0   Waste management & recycling Austria
Nibe                2.0   Ground source heat pumps     Sweden
Vacon               2.0   Power electronics            Finland

TOTAL              21.2




PORTFOLIO ANALYSIS*



  Geographical          Company Size
  US and Canada     36% >$2bn        49%
  EU and EFTA       45% $200-2bn     37%
  Rest of the World 16% <$200m       11%
  Cash              3%  Cash         3%

  Sectoral              PE ratios
  Energy            41% PER >20x     33%
  Water             23% PER  15-20x  34%
  Waste             33% PER <15x     27%
Cash                3%  Unprofitable 3%
                        Cash         3%
* of funds invested as of 31 August 2009


IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (August 2009)


During July the Company NAV increased by 4.6% compared to the MSCI
World Small Cap which increased by 8.8%.

In energy and climate change policy news, the Democratic Party of
Japan won a historic victory in the general election, with a
manifesto that includes pledges to cut GHG emissions by 25% from 1990
levels by 2020. Key to this goal will be a domestic cap-and-trade
scheme and the adoption of an arrangement whereby power companies buy
renewable energy for a fixed price. The Australian government took a
crucial step in boosting renewable energy growth, by mandating a 20%
renewable energy target by 2020, which could potentially unleash
AU$22bn in investment in the sector. In the US, the Energy and
Treasury Departments detailed plans to offer US$2.3bn in new tax
credits to clean energy equipment manufacturers by 2010. In the water
treatment and pollution control sector, the US Energy Department
selected 25 projects to share US$300m in economic stimulus grants for
alternative fuel vehicle and infrastructure projects, including
natural gas. In the EU, data collected by the European Environment
Agency showed that 2007 levels of sulphur oxides, nitrous oxides and
carbon monoxide were significantly down on 1990 levels. In the waste
sector, the US Senate passed an extension of the 'cash for clunkers'
scheme, allocating an extra US$2bn for the replacement of old
vehicles with newer more efficient models. Meanwhile, the Chinese
government announced that it will stop accepting imports of scrap
polysilicon to comply with environmental regulations such as solid
waste pollution laws.


In Alternative Energy & Energy Efficiency, companies exposed to
easing credit markets and cyclical recovery in the construction
sector outperformed. Kingspan (buildings energy efficiency, Ireland)
was up 34% following better than expected results, and Zumtobel
(energy efficient lighting, Austria) rose 35%. In Water Treatment &
Pollution Control, Mueller Water (infrastructure, US) rose 23%,
benefiting from the cyclical recovery and increased appetite for risk
following poor performance due to debt levels. The continued stimulus
opportunity for water stocks in the US boosted Pentair (water
infrastructure, US), up 5%, as funding announcements continued. In
Waste Technologies & Resource Management, Clean Harbors rose 13% over
the period, recovering from previous weakness and announcing
completion of an acquisition. Covanta (waste-to-energy, US), also
recovered and was up 8%, given strong long-term secular trends in the
waste market. Solar was weak due to ongoing oversupply issues,
affecting Sunpower (US) and PV Crystalox (UK). Macro concerns in Asia
weakened portfolio holdings in Hong Kong such as China High Speed
(wind turbine components). Metals recycler, Sims (Australia) suffered
due to profit taking and concerns over margin pressure.



Latest information available at:


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

16 September 2009

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