|
|
How green is my mutual fund
|
By Ami Ginsburg
The mutual fund landscape has experienced a significant upheaval in the past year. The private brokers who stood in the sidelines for years, watching the money flow to the bank funds instead of in their direction, have been enjoying a change in the current.
Altshuler Shaham Mutual Funds Management, owned by Gilad Altshuler and Kalman Shaham, is one such private broker. The group's funds attracted some NIS 200 million in 2004 and their assets grew by close to 80 percent.
Fund managers know, however, that in such a volatile industry they cannot rest on their laurels and must continue to be creative in order to attract more new customers.
Perhaps for this reason, Altshuler announced at the end of last week that it was setting up a new mutual fund that for now, at least, is the only one of its kind in Israel. Sources at Altshuler calls it a "green fund," and explain that it is setting its sights on a new trend that is already becoming fashionable in the West. The reference is to funds and investment bodies with an expressed goal of investing in companies with an "environmental" orientation, that develop environmentally friendly technology or that bear the standard of environmental and social values. Since there are not many companies in Israel that fit those criteria, Altshuler's green fund will invest mainly in overseas firms.
At first glance this looks like another marketing gimmick. What justifiable economic logic is there in investing in companies with a social orientation? If, for example, they pay their employees higher-than-average wages to be more "social" or use environmentally friendly materials (which are more expensive) - is that enough to provide shareholders surplus yield?
Altshuler thinks so. If one sets aside the noble ideals and fashionability for a moment, investing in "green" companies is likely to be economically worthwhile in the long run. This is because most Western countries are promoting "green" legislation, whose goal is to preserve the environment. One route, for example, is to extend tax leniencies to companies whose products are less pollutive.
Thus, for example, 19 American states have already adopted laws aimed at reducing consumption of polluting energy and the transition to green forms of energy. Such legislation is good for companies specializing in green energy technology, such as Ormat, an Israeli company that develops systems for producing energy from geothermal fields.
Others who benefit from the new laws are companies that manufacture and install wind turbines for producing electricity. In other places around the world, legislation is assisting companies that produce innovative organic substances that replace traditional pollutants such as chemicals and detergents.
The fashionability of this whole field is evident in the establishment of Dow Jones Sustainability Index (DJSI), which tracks the financial performance of the leading sustainability-driven companies. Still, in the past five years this index has not yielded particularly impressive results. In 2001, for example, the index had a yield of minus 15 percent, and in 2002 it fell a further 12 percent. In 2003, which was good for all the markets, the index jumped 36 percent, but the cumulative yield for the past five years is minus 12 percent.
"Many of the leading companies in the environmentally friendly technology industry are Scandinavian or Japanese," explains Chen Altshuler, Altshuler Shaham's research manager. "This presents a disadvantage [to Israeli investors] because buying their shares involves high commission fees. Still, I believe this field has a lot of potential. In the performance test, this fund is going to be a winner."
Altshuler has been researching suitable companies for several months now. One company on Altshuler's list is Novozymes, a Danish company that develops biological alternatives to various chemicals. Novozymes is traded on the Danish bourse at a market value of $3.8 billion.
Another potential company for Altshuler's investments is Vestas, also from Denmark, which is considered the leader in installing wind turbines. Vestas is valued at $2 billion. Altshuler notes that her research included the examination of several different fields by relevant specialists.
Altshuler's green policy includes non-investment in companies that are known polluters or that exploit their workers or employ children. "Children need to learn, and should not be working," says Altshuler. "This fund will not be investing in Nike shares."
Altshuler says that she has already identified 25-50 companies in which the fund can invest as soon as it is established and after its prospectus has been approved by the Israel Securities Authority. She stresses, however, that each investment will be made based on economic factors.
Wind farms such as this one in the Galilee could be on the fund's list.
(Yaron Kaminsky )
Top Articles
The national poet
The end of 2004 marked 70 years since the death of national poet Haim Nahman Bialik, and his work entered the public domain.
By Shiri Lev-Ari
Some suggestions for Mr. Fischer
It is essential to increase the transparency not only of monetary policy, but of the internal administration of the bank as well.
By Avraham Tal
Special Offers
Advertisement
Haaretz International
Weekly Digital Edition - Direct to your computer in seconds. Go >>
Shopping Service
New for Haaretz readers -- top Israeli brands on one site. Go >>
Help Israeli soldiers
Help our soldiers get home safely this Shabbat. >>
|
|
