XML FeedsSustainability of ecotrends in question
By CostBenefit on Aug 11, 2007 | In General, Europe, Companies,CSR,Business,Finance | Send feedback »
Link: http://search.ft.com/ftArticle?queryText=Corley&y=8&aje=false&x=10&id=070806009381
Elizabeth Corley, head of Allianz Global Investors Europe announced that Allianz's EcoTrends fund has been soft closed to new investment and warned: “You could argue that eco trends could become another dotcom bubble”.
She stated that demand was so strong that Allianz could have doubled the size of the €1.5bn offering had it chosen to accept all the money being waved in its direction.
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The WilderHill New Energy Global Innovation Index, a key barometer of the sector, jumped 30.9 per cent in the first half of the year, with wind and solar shares surging 49.2 per cent and 53.9 per cent respectively.
Even as of the end of March, before these gains were fully factored in, the Power Shares Global Clean Energy Portfolio, an exchange traded fund based on the WilderHill index, was trading on a price/earnings ratio of 50.6. The Dresdner Kleinwort global renewable index may be on a slightly more attractive p/e multiple of 38.2, but this still compares unfavourably with multiples of 16.2 for the S&P 500, 14.3 for Germany's Xetra Dax and 12.2 for the FTSE 100.
The clean energy and wind sector is perhaps the purest expression of the growing trend for “ethical” investment, with the UK's Investment Management Association reporting a 500 per cent increase in the volume of money invested ethically in the past decade. UK ethical funds alone attracted £100m in the first quarter of 2007, according to the IMA, three times as much as in the same period last year and as much as 2004 and 2005 combined.
Neil Dwane, European chief investment officer at RCM, the global equity arm of Allianz, remains upbeat about the EcoTrends format.
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Mr Dwane says that Conergy of Germany, the largest solar energy company in Europe, is emblematic of potential future returns from the sector. “We think they have got a breakthrough technology that will double the efficiency of the solar panel,” he says.
“Between now and 2009 we think Conergy will more than double their earnings.
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The Financial Times www.ft.com
August 6, 2007
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