Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 May 2005 and unaudited

DATA AND PERFORMANCE


Data                            Pricing & Performance
                                                  IEM    MSCI  Impax
                                                  Net   World   ET50
Share Price                                      Asset
(pence)                   72.25                  Value
Total Fund Size        GBP 38.2 Pence (31.05.05)  76.3   n/a    n/a
(m)
Market                 GBP 36.1 Premium/discount -5.4%
Capitalisation
Management fee             1.0%
Established         22 February      Performance
                           2002
Fund structure       Investment      1 month (%) +7.7%  +6.4%  +9.8%
                          Trust
Number of stocks             63     3 Months (%) -1.5%  +2.4%  +2.6%
held
Exchange                 London       1 year (%) +15.7% +10.1% +13.0%
Currency                    GBP       2 year (%) +38.8% +19.6% +23.4%
ISIN Number        GB0031232498 Year to date (%) -0.3%  +2.8%  +3.6%
Sedol                   3123249
Reuters RIC Code          IEM.L
Bloomberg Code           IEM LN


TOP TEN HOLDINGS


Company             Holding %   Description                Country
RPS Group                 3.4   Environmental consulting   UK
Vestas Wind Systems       3.3   Wind                       Denmark
Kurita Water              3.2   Water treatment            Japan
Itron                     3.1   Meters & software          US
Zenon Environmental       3.0   Membranes                  Canada
Casella Waste             2.8   Waste disposal & recycling US
Pall Corp                 2.6   Filtration                 US
Horiba                    2.4   Env. testing & monitoring  Japan
Pentair                   2.4   Water treatment            US
LKQ                       2.3   Automotive recycling       US

              Total      28.5


PORTFOLIO ANALYSIS*


Geographical          Company Size
North America     52% >£500m         29%
Europe            40% £100-500m      52%
Rest of the World 9%  <£100m         19%

Sectoral              Profitability
Energy            34% Profitable     88%
Water             33% Pre-Profitable 12%
Waste             30%
Cash              2%
* of funds invested as of 31 May 2005














MANAGER'S COMMENTARY (May 2005)


The company NAV was up 7.7% during the month compared with the MSCI
World Index which rose 6.4% and the Impax ET50 which increased by
9.8%.  The water and alternative energy sub-sectors performed
particularly well, reflecting corporate activity and a strong rally
in technology stocks.  The broader markets were led by a lower than
expected trade deficit in the US and a belief that interest rates may
have peaked.

During the month, General Electric launched its "ecomagination"
strategy with an eight-page advertisement in the Wall Street
Journal.  The company plans to more than double investment in
environmental technology to $1.5 billion and double revenues from
cleaner products to $20 billion by 2010, highlighting growth
prospects within the environmental sector.  In a separate speech, the
CEO of GE's infrastructure business said that the company was looking
to make further acquisitions for its water business, following the
purchase of Ionics in February and Osmonics in 2004.  This coincided
with the acquisition of Cuno (filtration, US) by 3M at a 31% premium
and reinforces the attraction of pure-play companies with leading
technologies in areas such as desalination and water reuse, markets
that GE predicts will nearly triple in size over the next 8 to 10
years.  Within alternative energy, General Motors and Toyota
announced plans to co-develop fuel-cell power systems, despite the
recent setbacks of the US automotive industry.  The project is likely
to be based in California where both carmakers have research
facilities, and where blueprints for a "Hydrogen Superhighway" have
been unveiled.  The State will invest $54m over five years to build a
network of up to 100 hydrogen fuelling stations, with up to 2,000
fuel cell vehicles on the road by 2010.  Finally, it was announced
that Ocean Power Delivery has sold its first three Pelamis wave
generators to a Portuguese consortium, taking the world's first
commercial wave farm a step closer to reality.

Aside from Cuno, which ended the month up 40%, Vestas rose by 35% on
solid first quarter results, in which it reiterated its financial
targets for 2005, along with plans to realise an EBIT margin of at
least 10% in 2008.  Pure Technologies (infrastructure monitoring,
Canada) rose 23% after announcing its first contract in the oil and
gas sector.  LKQ (automotive recycling, US) also rose by 23% after
continued expansion of EBIT margins and broker upgrades.  On the
downside Xantrex (power electronics, Canada) fell 23% on
disappointing first quarter results, and Questair (hydrogen
purification systems, Canada) declined by 16% after announcing the
backlog of orders in the last quarter was flat, despite revenues and
cash burn coming in line with earlier guidance.

In recent trades we have increased our exposure to Vestas, Pall Corp
and Xantrex (power electronics, Canada) whilst taking profits in
Itron, Badger (water meters, US), and Calgon Carbon (activated
carbon, US).



Latest information available at: www.impax.co.uk/asset/iemdown.htm

10 June 2005




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