5 February 2011, Page: 18
GO YOU good thing! Bloomberg New Energy Finance late last month showed worldwide investment in clean energy jumped by 30% last year to a record $US243 billion, driven by massive investment in China, offshore wind and rooftop solar in Europe, and increased spending on research and development generally. Another strong year is expected.The US President, Barack Obama, offered more cheer with a new goal: America would get 80% of its energy from "clean" sources (he included clean coal, gas and nuclear) by 2035. Trillions will be spent.
ArkX Investment Management, part owned by Westpac's "incubator" division Ascalon, views the sector as a top performer for 20 to 30 years and as a great hedge for Australian super funds, which are heavily overweight in fossil fuels.
This week the ArkX Clean Energy fund reported encouraging three year performance figures the minimum needed to win super fund clients. The tiny fund, with just $8 million invested and not yet open to retail investors, benchmarks itself against the New Energy Index (NEX), which tracks 80 listed clean energy firms worldwide earning at least half of their revenue by reducing greenhouse gas emissions.
ArkX looks for companies with proven technologies, strong balance sheets and positive cash flows. These aren't speccy start ups: the median market value of companies in its portfolio is $US3 billion. Some are indeed cleaning up, as ArkX director Tim Buckley pointed out on the Climate Spectator website, citing Siemens, Johnson Controls and NextEra Energy Resources.
Over three tough years to the end of calendar 2010, the fund returned -6.8% trouncing the sorry NEX return of -52.4% and also beating the MSCI world share index, which fell 19.8%. There are 25 companies in the ArkX portfolio, none of them Australian. "It's embarrassing", says its managing director, Geoff Evison, who blames our policy settings. "They need 'TLC': transparency, longevity and certainty".
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