NEW YORK, March 31 /PRNewswire/ --
Now that the stock market is showing signs of life again, green investors, who saw their portfolios sink even lower than the overall market, are benefiting from holding on. Unlike the mass of investors, who sold at the bottom of the market, green investors are taking a long term view.
In 2008, many green mutual funds, ETFs and individual stocks sunk 50-80%, while the Dow shed about 40%. But green investors can also expect their portfolios to rise higher than the overall market as it recovers.
While the Dow is up 21% from its low in early March, cleantech indexes are up 30%. Green building stocks are up 11.6% in the past two weeks, exceeding the 7.9% increase registered by the SP 500 and NASDAQ.
During a period of the most extreme withdrawals from U.S. mutual funds - 10 times the typical amounts - green mutual funds and ETFs have seen little outflow. Investors have been holding and, since the beginning of the year, buying into these funds.
Says Rob Wilder, founder of the bellweather Powershares WilderHill Clean Energy ETF (PBW), They are hanging on, knowing there's a bright light at the end of the tunnel.
People I work with are more optimistic than I've seen in years, notes Sam Jones, portfolio manager of the New Power Portfolio. The stimulus plan is a big piece of it - they finally feel they have backing. They've been swimming against the tide for a long time.
Clean energy and efficiency comprise about 14% of the American Recovery Reinvestment Act of 2009. All the elements we advocated for are in the plan, says Elena Foshay of the Apollo Alliance, a key group involved in developing the cleantech provisions.
A survey of institutional investors representing over US$1 trillion in assets, found that 49% are more likely or much more likely to increase their exposure to clean energy now than they were a year ago. Another 46% said their intentions haven't changed, and just 5% said they're less likely or much less likely to invest more in clean energy.
The optimism professional investors show in this survey demonstrates that despite the financial crisis and economic recession, investment momentum is growing to bridge the financing gap - institutional investors provide crucial long-term global financing for industries that mitigate climate change. (Survey conducted by New Energy Finance and DB Climate Change Advisors, Deutsche Bank's climate change investment business).
Progressive Investor identifies the following green investment trends for 2009:
-- Credit is already loosening up for clean energy projects in the US and Germany. Utility scale projects will likely drive growth beginning in the second quarter of 2009. Project financing hasn't stopped, but has become less predictable, slower and more expensive. -- Green venture capital firms with a strong track record are able to raise funds, albeit more slowly. Those that raised funds before the crash have their pick of strong candidates at lower valuations. -- Worldwide, over US$200 billion in incentives and spending for renewable energy, energy efficient buildings, smart grid and clean transportation is evident in stimulus bills across the world. Industry insiders expect the cleantech industry alone to create at least 2 million jobs in the U.S. -- The latest data from NASA shows unprecedented global warming in 2008 - 20 times that of recent annual warming, exceeding that of conservative climate model projections. 2000 scientists at a March conference in Copenhagen warned policy-makers to vigorously implement policies. Research shows that even the most stringent greenhouse gas reduction targets can benefit the economy, rather than hurt it. -- The big question for many years has been whether companies that make a commitment to sustainability outperform their peers. Last year, in the most difficult of economic periods, they did. In 16 out of 18 industries, companies with a commitment to sustainability outperformed industry averages by a significant 15%, representing US$650 million in protected market capitalization per company, according to A.T. Kearney. Investing in sustainability for the long term will prove to be the best way to protect a company's value through the months and years ahead. Leaders in each Green Stock category should outperform in 2009, including: -- Solar: First Solar, SunPower -- Wind: Vestas, Gamesa -- Geothermal: Ormat, WaterFurnace -- Smart Grid: IBM, Itron, EnerNoc -- Energy Efficient Buildings: Owens Corning, Baldor Electric, ICF International -- Water: TetraTech, Northwest Pipe The State of Green Investing 2009 Table of Contents: The Green Investment Landscape News Highlights Insider Views on the Cleantech Stimulus Cleantech Stimulus Worldwide Updates on Green Industry Sectors The Techie Perspective on the Stock Market Interview: Analysis of Market Conditions Stock Highlights
About Progressive Investor
Progressive Investor is a monthly newsletter that guides investors and analysts toward green investments. Published by SustainableBusiness.com, it covers all green business sectors, including renewable energy, green building, water and healthy lifestyles.
http://www.sustainablebusiness.com/index.cfm/go/progressiveinvestor.main
CONTACT: Rona Fried, +1-631-423-3277, rona@sustainablebusiness.com
Rona Fried for Progressive Investor, +1-631-423-3277, rona@sustainablebusiness.com
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