Sector Targeting Clean Technologies

Several new clean technology indices were announced over the last month. The Cleantech Capital Group’s CleanTech Index (CTIUS) launched on the American Stock Exchange this week. In January, Cronus Capital Markets (CCM) and the International Securities Exchange launched the ISE-CCM Alternative Energy Index (POW). ISE is the largest equity options exchange in the world. WilderShares announced it is launching a global clean energy index—the Clean Energy Global Innovation Index (NEX) —together with New Energy Finance. WilderShares introduced the first cleantech index, the Wilderhill Clean Energy Index (ECO), in August 2004 on the American Stock Exchange.

Closely tracking the emergence of cleantech indices is the trend toward exchange traded funds (ETF). In February 2005, PowerShares launched an ETF that tracks the WilderShares index, the $250 million PowerShares WilderHill Clean Energy Portfolio. WilderShares also plans to launch an ETF to track the new global fund. 2005 saw a movement of socially responsible investment funds into exchange traded funds. Clean technology funds are expected to follow and may be the better place to put your money. An article this month in Ethical Investing suggests that investors who apply more than one social screen to SRI investments tend to see poorer performance. In other words, the number of social screens is closely correlated with returns. The PowerShares Wilderhill ETF is up 70 percent since its inception a year ago. In contrast, SRI funds are up 11.3 percent and the Standard & Poor’s 500 Index 10.3 percent over the same period.