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Where You Can Invest in Renewable Energy Companies

14 November 2010 No Comment

Three San Diego pioneers lead the industry

You can talk to just about any financial planner or stock broker in town, and they can help you find alternative energy indexes nationwide. However, at least three San Diego companies are pioneers in the renewable energy investment world. As with any Investment, you want to do due diligence before sinking in your money. Here is a brief summary of San Diego’s pioneers:

Funds for Pure Energy Plays

CEO and index manager: Robert Wilder

Company: Wildershares, LLC

Based: Encinitas, CA

Year founded: 2003

What he does: Runs clean energy indexes, which have become industry standards, in the renewable energy sectors.”Wall street was missing the inflection point where clean energy made sense,” said Wilder. “That opportunity led to us to creating this index.”

Index description: The company’s flagship WilderHill Clean Energy Index tracks 42 US companies focused on renewable energy products. The associated fund, which sold out $10 million in shares on its launch day in March 2005, has current assets of $625 million.

The company’s second WilderHill New Energy Global Innovation Index tracks 86 renewable energy companies worldwide. And a third, the WilderHill Progressive Energy Index, tracks 36 companies specializing in carbon clean-up. This is expected to launch a fund in October.

Performance: The company’s flagship index is up 46%, since its March 2005 launch to October. The global index is up 18%, in the first 10 months since debuting in January 2006. The third index is up 15%, in one year ending June 2006.

Risk level: High. Pure energy stocks can be extremely volatile, rising and falling as much as 5% a day, or 30% a quarter. This is because of the sunrise nature of the industry; one solar technology company might go bankrupt, while another may grow several fold.

Quirks: Wilder lives on a one-acre property powered largely by solar energy.

Web: wildershares.com

Fund for Mixed Energy Plays

Co-founder: Peter Meisen, president of the Global Energy Network Institute (GENI), a non-profit organization inspired by scientist Buckminster Fuller.

Based: San Diego

What he did: Teamed up with KLD Research and Analytics, a Boston-based investment group specializing in socially-responsible indexes, to create a worldwide index for renewable energy companies.

Fund description: The KLD Global Climate 100 Index tracks large, mid and small-cap companies involved in renewable energy sources. General Electric, BP, Shell, and Sempra (the parent company of San Diego Gas & Electric) are included in the portfolio, because “they are leaders in the world to drive the transition to cleaner energy resources,” said Meisen.

Performance: The fund is up 19.15%, since launching in July 2005, based on annualized returns through September this year. (The benchmark MCI world index is up 17.91%).  It is currently offered by Shinko Securities in Japan, with portfolio size of $22 million as of October.

Future fund: KLD is in discussion with a US securities firm to launch the fund domestically by summer ‘07. It will be marketed to institutional and individual investors.

How it started: “Obviously, if you are going to shift an industry, you have to shift the money,” said Meisen. “Where is the money in the world, and the biggest pools of money? They come from institutional investors and pension funds. These fund managers have started in the last few years to assess the financial risk of their portfolios from climate change. We need another gauge on how all our returns on investments will be made from increasing CO2 around the world. Hopefully, we have created a product that will attract the longterm institutional investor, and shift investment away from fossil fuels into transitional and renewable fuels,” said Meisen.

Risk level: Medium. The riskier small cap companies are balanced by publicly-traded, large cap companies, with each company receiving an equal 1% weight. “We have designed it to be a little less volatile than its competitors,” said Chris McKnett, project manager. “It’s broadly diversified among sectors, geographic region and company size.”

Web: kld.com

Financial Planning with Renewable Energy Plays

Founder and principal: Judith L. Seid, CFP®

Company: Blue Summit Financial Group

Disclosure: Securities officer of Cambridge Investment Research Inc, member NASD/SIPC

Based: San Diego

Year founded: 1994

What she does: Heads an investment services firm specializing in socially-responsible investments. It is believed to be the only such firm in San Diego.

Services: Offers more than a dozen investment options – ranging from mutual funds to individual stocks – for clients interested in renewable energy and environmentally-friendly companies. These are incorporated into a total portfolio that takes into consideration retirement, estate and tax planning needs and goals.

Philosophy: “Alternative energy stocks tend to be volatile and probably would be appropriate to be no more than five to ten percent of a client’s portfolio, the aggressive part of their portfolio,” said Seid. “Whatever we recommend is from a prudent and disciplined financial planning approach.”

Performance: For renewable energy investments, volatile. “It’s all over the map,” said Seid.

“Historically, we have seen that when oil prices go up, alternative energy stocks skyrocket.”

Risk: Individual portfolios vary according the client’s financial and life goals.

Web: bluesummitinvestments.com

Follow Helen on Twitter @HelenChang

This article is part of a Green Energy series. Related Articles:

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