Investments in renewable energy-based companies are becoming an accepted component of advice-driven investor portfolios, a new survey of financial advisers reveals.
The results showed that 55% of advisers allocate at least a portion of their individual and institutional clients' portfolios to green investments, including companies focused on wind, solar, hydro, clean technology and carbon-reduction strategies. The survey was conducted on behalf of TerraVerde Capital Management in February and March. TerraVerde manages a hedge fund that invests in strategies seeking to reduce the global carbon footprint.
‘What we regard as 'alternative' today will one day be one of the primary sources of energy around the globe,’ says Richard Bookbinder, managing member of TerraVerde Capital Management. ‘This sets the stage for investors to not only do something good for the environment, but good for their portfolios. Yes, we have a ways to go, but if we repeat this same adviser survey even a year from now, I think we'll be pleasantly surprised at how mainstream the green asset class has become.’
Of the advisers whose clients are invested in green companies, half access the asset class via mutual funds (50%), followed by individual securities (32%) and funds of funds (12%). Approximately 10% of advisors access green companies through exchange-traded funds. Other vehicles used to access green investments include hedge funds (4%) and private equity funds (2%).
Fifty-five percent of advisers do not think there is sufficient progress being made in Washington, D.C., on energy independence or climate change issues. Yet, 35% of respondents believe the government should not get involved in the way public companies address matters of environmental responsibility. However, it is big government that stimulates growth in green, say 45% of advisers, while 38% say future of green depends on interest from venture capital funds.
Overall, 38% advisers have seen an increase in client demand for green investments over the last 18-24 months.
SOURCE: TerraVerde Capital Management Â Â