The announcement last week that FTSE has expanded its Environmental Opportunities Index series from one product to 10 is yet another indicator that global warming has moved responsible investing from a niche sector into the mainstream.
Launched in July with the EO All Share Index, the series includes companies that derive at least 20% of their business from environmental markets and technologies as determined by environmental research specialists Impax Group plc.
The new indices are:
FTSE EO 100, which covers the largest 100 All Share companies;
FTSE EO Water Technology 30 and FTSE EO Water Technology Benchmark;
FTSE EO Renewable Energy 50 and FTSE EO Renewable Energy Benchmark;
FTSE EO Energy Efficiency 50 and FTSE EO Energy Efficiency Benchmark;
FTSE EO Waste and Pollution Control 30 and FTSE EO Waste and Pollution Control Benchmark.
The FTSE Environmental Opportunities Indices are now part of FTSE's Environmental Markets Index Series--already including the FTSE ET50 which tracks the performance of the world's largest pure play environmental technology companies.
Driving the expansion is a surge of pending international legislation imposing efficiency and standby power limits for electricals, mandating improved building insulation and energy management, banning incandescent light bulbs and calling for new vehicle standards for emission/efficiency performance by 2011.
"The FTSE Environmental Markets indices track the performance of those companies who are best positioned to benefit from the shift to a global, low-carbon economy," said Will Oulton, FTSE Group head of Responsible Investment.
Nancy R. Mandell is managing editor of Wealth Manager
MAKING THE INTELLIDEX CUT
By Nancy R. Mandell
It's not called "Intellidex" for nothing. Thanks to its Dynamic Intellidex methodology, Invesco PowerShares claims that its Dynamic Financial Sector ETF (PFI) held zero exposure to some of the industry's biggest losers last year.
As big as they are--or should we say were--companies that did not make the Intellidex cut included AIG, Wachovia, Fannie Mae and Freddie Mac, Citigroup, Lehman Brothers, Washington Mutual, Morgan Stanley, Bank of America, Goldman Sachs and Merrill Lynch.
ETFs based on the Dynamic Intellidex Indexes use 25 different criteria to evaluate stocks. Among them are fundamental growth, valuation, timeliness and risk factors. In an effort to assure consistent and accurate representation of a specific market segment, Intellidex seeks out companies with the highest potential for capital appreciation and re-evaluates quarterly.
Nancy R. Mandell is managing editor of Wealth Manager.