NYSE Money Sense

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Beyond the Bell Sidebar:
Green Investing

A week and a half before the Oct. 2 Green Grid conference — on the same day the United Nations held its New York Summit on Climate Change — the NYSE hosted a Webcast Sustainability Forum, which considered the issue primarily from both the issuer and the investor point of view.

Brian Rice, investment officer at the California State Teachers’ Retirement System; Brian Boyd, vice president for worldwide environment, health and safety at Johnson & Johnson (JNJ); Bennett Freeman, senior vice president for sustainability research and policy at Calvert Investments, the largest U.S. family of sustainable and responsible mutual funds; and John Prestbo, editor of the Dow Jones Sustainability Indexes, embraced sustainability investment in a discussion led by Jay Whitehead, president of Shared-Xpertise, publisher of Corporate Responsibility Officer magazine and co-author of The Post-Carbon Economy. Investment returns based on the Dow Jones Sustainability Indexes basically parallel those of the overall market, according to Prestbo. “What the index has shown in 10 years of operation is that you can get a market return by investing in companies that operate sustainably,” he said. The participants agreed that investment strategies based on sustainable attributes will grow, and the panelists predicted that the next big investment category would be alternative energy companies. Pointing to expected government regulation, mandated carbon-emissions cuts, and greater incentives for renewables and for energy efficiency across the board, Freeman said that “investors in the companies who provide those solutions are going to be the winners.”

As consumer and investor interest in sustainability and clean energy continues to grow, more alternative-energy exchange-traded funds (ETFs) — securities that trade like stocks but look like index funds because they own baskets of stocks that mirror the composition of underlying market — are coming to market.

NYSE Euronext’s (NYX) NYSE Arca exchange lists several ETFs that focus on the clean energy industry, including Market Vectors Global Alternative Energy ETF (GEX), Market Vectors Solar Energy ETF (KWT), PowerShares Global Clean Energy Portfolio (PBD), PowerShares WilderHill Clean Energy Portfolio (PBW), FirstTrust Global Wind Energy Fund (FAN) and Claymore/MAC Global Solar Energy Index ETF (TAN).

To view the archived Webcast, click here. 
To learn about alternative energy ETFs listed on NYSE Arca, click here.