Climate change funds are "consistently" outperforming the rest of the market, according to a new report from ethical finance advisory firm Holden & Partners.
The company's Annual Guide to Climate Change Investment assessed the top performing climate change related investment funds operating in the clean energy water, agriculture, forestry and ethical investment sectors and found that despite some volatility in the past 18 months they were broadly outperforming conventional funds.
Citing figures from FTSE showing that its Environmental Opportunities indices have substantially outperformed the all cap index over the past five years, the report showed that climate change related investment funds were benefiting from the strong performance of low carbon businesses.
The report also revealed that climate change related funds have outperformed the MSCI world index over two and three years, with some funds, including Schroders Global Climate Change and F&C Climate Opportunities, also outperforming the market over one year.
"There is a perception that clean tech investment is high risk and focused on small start ups that will either make it big or go out of business," report author Mark Hoskin told BusinessGreen.com. "But they tend to be heavy industrial companies that have substantial market caps – these investments are lower risk than people expect and we are seeing them outperform the market."
That is not to suggest that climate change funds represent a 100 per cent safe investment, and Hoskin was quick to point out that clean energy funds in particularly have suffered considerable volatility over the past year as a result of the global recession. But he added that even clean energy firms were now looking undervalued and well positioned for recovery, while less high profile sectors such as water and agriculture have performed relatively well throughout the recession.
"These funds are consistently outperforming the market," he said. "All the regulatory and political drivers are working in their favour while they don't face the same risks the traditional energy investments face."
Investors argue governments must do more to deliver strong carbon price signal 20 May 2009
Landmark ruling strengthens Obama's hand as he tries to force through climate change bill 20 Apr 2009
BusinessGreen.com runs down the key environmental measures from this year's budget as they are announced 22 Apr 2009
Sustainability is increasingly important to investors targeting Brazil, Russia, India and China, according to new report 09 Feb 2009Waxman-Markey bill secures narrow House victory and prepares for battle in the Senate 29 Jun 2009
Resolution follows similar decision by Shell shareholders last month 09 Feb 2010
Measures needed to ensure cars do not charge from fossil fuel-powered grid 09 Feb 2010
Researchers use salicornia plants in carbon-negative process to grow biofuels 09 Feb 2010
More news
Friends of the Earth’s biofuels campaigner Kenneth Richter argues that biofuel targets are a distraction from tried-and-tested ways of reducing transport emissions 09 Feb 2010
Trewin Restorick wonders if the concept du jour of "nudging" behaviour change can help curb UK carbon emissions 08 Feb 2010
From feed in tariffs to vanishing top soil, we run down the top stories from the past week 08 Feb 2010 More in-depth
Post your comment
Send an email to the Business Green editor at feedback@businessgreen.com
