Green Mutual Funds provide value to communities

The Value In Socially Responsible Investing

Marc L. Ross, Investopedia

Once considered a niche area of investment practice, socially responsible investment (SRI) now embraces a wide investment audience that includes individuals, high net worth and otherwise, and institutions such as pension plans, endowments and foundations. Religious tenets, political beliefs, specific events and the broad remit of corporate responsibility (i.e. green investing, social welfare) all drive this investment practice.

Indeed, the professional association USSIF: The Forum for Sustainable and Responsible Investment, estimates in its "2010 Report on Socially Responsible Investing Trends" that around $3 trillion in assets under management subscribe to one or more of the aforementioned approaches to socially responsible investing.


$316 billion in socially responsible mutual funds alone

Over 250 mutual funds in the United States alone, utilize a social screening process, with assets of approximately $316 billion. There are hedge and exchange-traded funds (ETFs) that adopt a socially conscious approach to investment, as well.

Socially responsible investing expresses the investor's value judgment of which several approaches may be used. One example is when an investor avoids companies or industries that offer products or services the investor perceives to be harmful. The tobacco, alcohol and defense industries are commonly avoided by people who try to be socially responsible investors.

In the 1980s, divestment of American companies doing business with South Africa was highly publicized. Another is a performance ranking in terms of how well a company achieves on not only financial metrics, but also on social, environmental, governance and ethical issues.

Yet another involves active engagement between the company's shareholders and its management. Finally, there is the activist tack that involves the investor advocating specific issues. Any one or a combination of these approaches is a critical driver in the process of portfolio management and fiduciary oversight.

Moreover, the practice is global, with different approaches emphasized in various countries as a function of their culture, government, business environment and their interrelationship. What obtains as socially responsible or not has led to differing opinions on whether these approaches yield competitive returns.


For Whose Benefit?

Socially conscious investors may assume a more holistic view of a company when making investment decisions, looking at how it serves its stakeholders, a rubric under which are subsumed not only shareholders, but also creditors, management, employees, the community, customers and suppliers. Within this context, socially responsible investment seeks to maximize welfare while earning a return on one's investment that is consistent with the investor's goals.

On the surface, these two notions may appear contradictory. For example, there may be an implicit cost of such an approach to the extent that it eschews profitable companies and sectors. Tobacco, alcohol, firearms and gambling have been lucrative industries.

However, to a socially conscious investor, their inclusion in a portfolio would fail to serve the investor's objectives of living in a world void of conflict and legal stimulants and depressants. As with any investment approach, the socially conscious investor needs to:

- Define his, her or its risk and return objectives and constraints.

- As to the latter, the investor needs to determine what its socially conscious constraints are. These may differ considerably, depending upon the investor. Muslims who wish to be compliant with Shari'a law would exclude any companies connected with the production, sale and distribution of alcohol, any financial institution that lends and any business that profits from gambling. Investors opposed to armed conflict as a means of dispute resolution may avoid any company or industry associated with defense, national security or firearms.

- Once the investor defines its constraints, it must decide upon an approach to implement them, be it the use of inclusionary or exclusionary screens, best practices criteria or advocacy. The type of investor may determine the most suitable approach. For example, advocacy and dialog with a company or industry would be better suited to a large public pension fund.

Consider the work of CalPERS or the Swiss billionaire activist Martin Ebner, the latter more an example of individual shareholder activism. By contrast, an individual investor working with an advisor would find the screening process more feasible.

- Social investing has implicit costs - the returns potentially foregone through the exclusion of companies with unacceptable products or business practices - and explicit costs.

For those considering an active approach, fees for exchange-traded and mutual funds tend to be a bit higher. For investors seeking a passive management, there are fewer indices to replicate and the funds that do typically bear higher costs.

- Diversification is always an important consideration. Screens may hamper this process, unintentionally or otherwise.
Utilizing this type of traditional investment framework would appear to make the process manageable, so long as the investor weighs the costs and benefits of this type of investment approach carefully.

However, there could appear to be a dilemma upon whose horns the investor invariably would be impaled. For example, if investment in such "vice" products as alcohol and tobacco is anathema to a socially conscious investor, what about the transport and energy industries?

After all, the products have to be shipped to the point of sale which requires various means of transport which, in turn, require fuel. These types of considerations make the precise definition of one's socially responsible investment goals all the more crucial. The practice is often a gray area.

Depending upon the perspective of the individual, companies may display characteristics that are both irresponsible and responsible.

The Bottom Line
Socially responsible investment reflects an investor's values. While the opportunities in this realm of investment management have grown considerably, one may not ignore best practices of investing.

The investor must clearly define their goals when undertaking this sort of approach, recognizing its potential trade-offs and clearly articulating a policy that considers all the variables when looking to maximize the good over the plentiful and abundant.

Risk management and attention to costs are essential. Research seems to indicate that results from socially conscious investing are not statistically significant from a more conventional approach.

Why "Peak Nature" requires a collective consciousness bump

Capitalism has no soul, by Timothy Morton, Adbusters.org


Nature is the featureless remainder at either end of the process of production. Either it’s exploitable stuff, or value-added stuff. Whatever: it’s basically featureless, abstract, gray. It has nothing to do with nematode worms and orangutans, organic chemicals in comets and rock strata. You can scour the Earth from mountaintop to Marianas Trench. You will never find Nature. That’s why I put it in capitals. I want the reader to see that it’s an empty category looking for something to fill it. Gray goo.

Capitalism did away with feudal and pre-feudal myths such as the divine hierarchy between classes of people. In so doing, however, it substituted one heck of a giant myth of its own: Nature. Nature is precisely the lump that preexists the capitalist labor process. Martin Heidegger has the best term for it: standing reserve, Bestand.

Bestand means “stuff,” as in the old ad from the 1990s, “Drink Pepsi: Get Stuff.” There is an ontology implicit in capitalist production, then, that is strictly materialism as defined by Aristotle. Funnily enough, however, this materialism is not fascinated with material objects in all their manifold specificity. It’s just stuff. This viewpoint is the basis of Aristotle’s problem with materialism. Have you ever seen or handled matter? Have you ever held a piece of “stuff”? Sure, I’ve seen lots of objects: Santa Claus in a department store, snowflakes and photographs of atoms. But have I ever seen matter or stuff as such? Aristotle says it’s a bit like searching through a zoo to find the “animal” rather than the various species such as monkeys and mynah birds. Marx says exactly the same thing regarding capital. “The ‘expanded’ form [of the commodity] passes into the ‘general’ form when some commodity is excluded, exempted from the collection of commodities, and thus appears as the general equivalent of all commodities, as the immediate embodiment of Commodity as such, as if, by the side of all real animals, there existed the Animal, the individual incarnation of the entire animal kingdom – or as if, to use an example from commercial capitalism, by the side of all real spices, there existed the Spice.” As Nature goes, so goes matter. The two most progressive physical theories of our age, ecology and quantum theory, need have nothing to do with it.

What is bestand? Bestand is stockpiling. Gallon after gallon of oil waiting to be tapped. Row upon row of big box houses waiting to be inhabited. Terabyte after terabyte of memory waiting to be filled. Stockpiling is the art of the zeugma – the yoking of things you hear in phrases such as “wave upon wave” or “bumper to bumper.” Stockpiling is the dominant mode of social existence. Giant parking lots empty of cars, huge tables in restaurants across which you can’t hold hands, vast empty lawns. Nature is stockpiling. Range upon range of mountains, receding into the distance. The Rocky Flats nuclear bomb trigger factory was sited precisely to evoke this kind of mountainous stockpile. The eerie strangeness of this fact confronts us with the ways in which we still believe that Nature is “over there” – that it exists apart from technology, apart from history. Far from it. Nature is the stockpile of stockpiles.

So again, I ask, what exactly are we sustaining when we talk about sustainability? An intrinsically out of control system that sucks in gray goo at one end and pushes out gray value at the other. It’s Natural goo, Natural value. Result? Mountain ranges of inertia, piling higher every year, while humans boil away in the agony of uncertainty. Just take a look at Manufactured Landscapes: the ocean of telephone dials, dials as far as the eye can see, somewhere in China. A real ocean – it lies there at this very moment.

Societies embody philosophies. Actually, what we have in modernity is much, much worse than just instrumentality. Here we must depart from Heidegger. What’s worse is the location of essence in some beyond, away from any specific existence. To this extent, capitalism is itself Heideggerian! Whether we call it scientism, deconstruction, relationism or just good old-fashioned Platonic forms, there is no essence in what exists. Either the beyond is itself nonexistent (deconstruction, nihilism), or it’s some kind of real away from “here.” The problem, then, is not essentialism but this very notion of a beyond. Think of what Tony Hayward said. He said that the Gulf of Mexico was a huge ocean, and that the spill was tiny by comparison. Nature would absorb the industrial accident. I don’t want to quibble about the relative size of ocean and spill, as if an even larger spill would somehow have gotten it into Hayward’s thick head that it was bad news. I simply want to point out the metaphysics involved in Hayward’s assertion, which we could call capitalist essentialism. The essence of reality is capital and Nature. Both exist in an ethereal beyond. Over here, where we live, is an oil spill. But don’t worry. The beyond will take care of it.

Meanwhile, despite Nature, despite gray goo, real things writhe and smack into one another. Some leap out because industry malfunctions, or functions only too well. Oil bursts out of its ancient sinkhole and floods the Gulf of Mexico. Gamma rays shoot out of plutonium for 24,000 years. Hurricanes congeal out of massive storm systems, fed by the heat from the burning of fossil fuels. The ocean of telephone dials grows ever larger. Paradoxically, capitalism has unleashed myriad objects upon us, in their manifold horror and sparkling splendor. Two hundred years of idealism, two hundred years of seeing humans at the center of existence, and now the objects take revenge, terrifyingly huge, ancient, long-lived, threateningly minute, invading every cell in our body.

Modern life presents us with a choice:

1) The essence of things is elsewhere (in the deep structure of capital, the unconscious, Being).

2) There is no essence. (At present I believe that the restriction of rightness and coolness to this choice is one reason why planet Earth is in big trouble right now. And I believe that the choice resembles a choice between grayish brown and brownish gray). That’s why I believe in a third choice:

3) There is an essence, and it’s right here, in the object resplendent with its sensual qualities yet withdrawn.

And that’s why I believe we are entering a new era of academic work, where the point will not be to one-up each other by appealing to the trace of the givenness of the openness of the clearing of the lighting of the being of the pencil. Thinking past “meta mode” will at least bring us up to speed with the weirdness of things, a weirdness that evolution, ecology, relativity and quantum theory all speak about. This weirdness resides on the side of objects themselves, not our interpretation of them.

When we flush the toilet, we imagine that the U-bend takes the waste away into some ontologically alien realm. Ecology is now beginning to tell us of something very different: a flattened world without ontological U-bends. A world in which there is no “away.” Marx was partly wrong, then, when in The Communist Manifesto he claimed that in capitalism all that is solid melts into air. He didn’t see how a kind of hypersolidity oozes back into the emptied out space of capitalism, a hypersolidity I call here hyperobjects. This oozing real comes back and can no longer be ignored, so that even when the spill is supposedly “gone and forgotten,” there, look! There it is, mile upon mile of strands of oil just below the surface, square mile upon square mile of ooze floating at the bottom of the ocean. The cosmic U-bend is no more. It can’t be gone and forgotten – even ABC News knows that now.

When I hear the word “sustainability” I reach for my sunscreen.

The End of the World
When Neo touches a mirror in The Matrix it adheres to his hand, instantly changing from reflective surface to viscous substance. The very thing that we use to reflect becomes an object in its own right, liquid and dark like oil in the dim light of the room in which Neo has taken the red pill. The usual reading of this scene is that Neo’s reality is dissolving. If we stay on the level of the sticky, oily mirror, however, we obtain an equally powerful reading. It’s not reality that dissolves, but the subject, the very capacity to “mirror” things, to be separate from the world like someone looking at a reflection in a mirror – removed from it by an ontological sheet of reflective glass. The sticky mirror demonstrates the truth of what phenomenology calls ingenuousness or sincerity (I’m thinking here of the work of Ortega y Gasset, Levinas and Graham Harman). Objects are what they are, in the sense that no matter what we are aware of, or how, there it is, impossible to shake off. In the midst of irony, there you are, being ironic. Even mirrors are what they are, no matter what they reflect. In its ingenuous sincerity, reality envelops us like a film of oil. The mirror becomes a substance, an object. Hyperobjects push the reset button on sincerity, just as Neo discovers that the mirror no longer distances his image from him in a nice, aesthetically manageable way, but sticks to him.

The beautiful reversibility of the oily, melting mirror speaks to something that is happening in a global warming age, precisely because of hyperobjects: the simultaneous dissolution of reality and the overwhelming presence of hyperobjects, which stick to us, which are us. The Greeks called it miasma, the way blood-guilt sticks to you.

Ecological thoughts for deep thinkers

Germany building Electro-Hydrogen economy of the future

The distributed Internet communication revolution is converging with distributed renewable energies, giving birth to a powerful Third Industrial Revolution that is going to fundamentally change German society.


Beyond the Financial Crisis: Germany's Plan to Regrow the Global Economy

by Jeremy Rifkin, HuffingtonPost.com

At the moment, Germany is embroiled in a fierce debate over how to save the Eurozone and, with it, the future of the European Union. Although stringent austerity programs will have to be enacted in the member countries to reduce government debt, and new regulatory mechanisms put in place to oversee European financial institutions and markets, there is a dawning realization that these measures alone will be insufficient to assure the future of Europe and its member states. What's required, above all else, is a new sustainable economic growth plan that can take Europe into the future. That's beginning to happen.

While the rest of the world is in a near panic over the prospect of a second collapse of the global economy, a fresh new economic wind is blowing across Germany. In discussions with German business leaders over the past several months, and in recent conversations with Chancellor Angela Merkel and key political leaders in Berlin, it has become clear that Germany is embarking on a journey into a new economic era. The German plan is based on the historical understanding that the great economic paradigm shifts in history occur when new communications revolutions converge and merge with new energy regimes. New energy revolutions make possible more expansive and integrated trade. Accompanying communication revolutions manage the speed and complexity of commercial activity made possible by the new flow of energy. Today, the distributed Internet communication revolution is converging with distributed renewable energies, giving birth to a powerful Third Industrial Revolution that is going to fundamentally change German society.

The Merkel administration has launched an ambitious effort to transition the West's leading exporting power into a Third Industrial Revolution (TIR). The federal government has teamed up with six regions across Germany to test the introduction of an "energy Internet" that will allow tens of thousands of German businesses and millions of home owners to collect renewable energies onsite, store them in the form of hydrogen, and share green electricity across Germany in a smart utility network, just like we now share information online. Entire communities are in the process of transforming their commercial and residential buildings into green micro-power plants, and companies like Siemens and Bosch are creating sophisticated new IT software, hardware, and appliances that will merge distributed Internet communications with distributed energy to create the smart buildings, infrastructure, and cities of the future.


Third Industrial Revolution gaining momentum

The transition into the new Industrial Revolution is quickly picking up momentum. In May, the government announced that the country's 17 nuclear power plants would be shut down by 2022. Then, in late summer, the German Association of Energy and Water Companies reported for the first time that renewable energy sources now account for nearly 20% of the country's electricity, putting Germany ahead of schedule in its goal of producing 35% of its electricity from green energy by 2022. On September 12th, Dr. Dieter Zetsche, the Chairman of Daimler, unveiled the company's hydrogen fuel-cell car at the opening of the Frankfurt International Auto Show. The company that launched the Second Industrial Revolution 125 years ago with the invention of the gasoline-powered automobile has joined with seven industrial partners -- EnBW, Linde, OMV, Shell, Total, Vattenfall, and the National Organization of Hydrogen and Fuel Cell Technology -- in a partnership to establish hydrogen fueling stations across Germany in preparation for the mass production of zero-emission fuel cell vehicles in 2015, signaling the beginning of the post-carbon auto era and a Third Industrial Revolution.

The creation of a renewable energy regime, loaded by buildings, partially stored in the form of hydrogen, distributed via an energy internet, and connected to plug-in zero-emission transport, establishes the essential 5-Pillars of a Third Industrial Revolution. The forty year build out will create thousands of businesses and millions of sustainable jobs and position Germany as the leader in the next industrial revolution.

Germany's ability to export the new model throughout the European Union and in its partnership regions in the Mediterranean, North Africa, and beyond, will set the framework for the next great stage of European integration, and ultimately determine whether the European political experiment and the European Dream succeeds or fails.

The opportunity is clear. The European Union has 500 million consumers and an additional 500 million potential consumers in its partnership regions, giving it the prospect of becoming the largest and wealthiest internal commercial market in the world. The key is creating a seamless green energy infrastructure, electricity grid, and communication and transport network that will allow one billion people to engage in "sustainable" commerce and trade across the European continent and its periphery. This represents the next stage of European integration as a political union.

In May 2007, the European Parliament issued a formal written declaration endorsing the Third Industrial Revolution (TIR) vision as the long-term economic road map for the European Union. The Third Industrial Revolution is currently being implemented by the various agencies within the European Commission as well as in the member states.


Can Germany be a sustainable lighthouse for the world?

Now, Germany, the economic engine of the European Union, has set out on a course to quickly transform its economy into the new economic paradigm and serve as a lighthouse for moving the Third Industrial Revolution infrastructure across the European space. To the extent that Germany can effectively create a sustainable and prosperous post-carbon Europe and transform the continent into the largest integrated market space in the world, Germany will prosper, and the European Union will come of age. Other continental markets and continental unions in Asia, Africa, and the Americas will likely follow suit.

The world community will be watching the German experiment closely to see whether this new economic model can serve as a template for ushering in a new economic era. Germany's future, as well as Europe's and the world, depends on its success.


Jeremy Rifkin is the author of The Third Industrial Revolution: How lateral Power is Transforming Energy, the Economy, and World.

Green activists may lead Wall Street protesters

350.org US Campaign Director Phil Aroneanu believes ecologists and environmentalists have a big role to play in the Occupy Wall Street protest, which will be joined tomorrow by support from thousands of NYC union members.

Here's a piece Phil published today on HuffingtonPost.com:

Why Environmental Activists Should Occupy Wall Street

by Phil Aroneanu


"Go Paul!"

That's what a top State Department official wrote in an email to the top lobbyist for TransCanada, a top tar sands oil producer, upon hearing that he had garnered support for the Keystone KL pipeline from a US Senator. That shouldn't be too surprising, since the lobbyist was one of Hilary Clinton's campaign aides during her presidential run. The cozy relationship between corporate lobbyists and decisionmakers isn't anything new, but it's just as despicable as ever. And with the Keystone XL pipeline issue, corporate America's fingerprints are turning up all over the place.

That's why over 1200 ordinary people from around the country took the extraordinarily courageous step of sitting-in and getting arrested at the White House in late August -- to show President Obama and leaders on Capitol Hill that real people can be just as powerful as corporate interests. Will President Obama, who campaigned saying "I don't take a dime of their [lobbyist] money, and when I am president, they won't find a job in my White House," be willing to push back against TransCanada, its Wall St. financiers, and the stranglehold these corporations have on our government, or will he be complicit in destroying our democracy, our land and our atmosphere?

Later on this year, when President Obama makes a decision whether to go forward with the tar sands pipeline, we'll know where he stands. But the Occupy Wall Street protesters aren't going to wait that long. The amount of energy that the Occupy Wall Street movement has generated so far is incredible. Over the course of two weeks, their numbers have ballooned from a few hundred to thousands, and Occupy movements have started up in dozens of other cities around the country and the world. Why? Because Americans are sick and tired of top officials cozying up to lobbyists, of political cronyism and petty corruption at the highest levels of government.

While from an outside perspective the Occupy Wall Street protests might seem disorganized, their message is clear: If Wall Street is occupying the State Department and the halls of Congress, its time for the people to occupy Wall Street. In the case of the Keystone pipeline, the paper trail shows that Big Oil and Wall Wt. certainly walk the halls of the State Department with impunity. Now, it's time for climate activists to join hands with the Wall Street protestors, and occupy together.

Here's a quick video of some Occupy Wall Street folks talking about the connection between climate change and the occupation:

Morose in markets, lack of news means buy time?

Green funds are likely to gap up in late Q4 and early Q1

Historically the 3rd year in a US Presidency is the worst for North American capital markets, particularly equities, and as Q4 approaches we have to examine whether this year offers the usual cyclical investment opportunity. The cycle makes sense because the honeymoon for the US President is long over, and the 3rd year is a bit early to pump the economy for the election. 2012 will be a different story, inflation will be the fear, and equities will be back in vogue.

While searching for news on "green mutual fund" it seems there isn't too much going on right now.

175 results but that's just Google trying hard... when I take the quotes off there are 2 results. I'd say that right there is an indication that things are a bit too quiet, and green funds are likely to gap up in late Q4 and early Q1.

Joe Trainor, CIM
September 13, 2011

Investing in Green Mutual Funds and ETFs

Buying cleantech investment funds safer than individual stocks

by Gavin Adamson, TheGlobeandMail.com

As with hybrid autos and organic food, consumer demand is driving the growth of green investment choices, and new options come available every week.

“People are asking about green and socially responsible investments, and certainly more institutions and pension funds are paying more attention to the area,” says Adrian Mastracci, president of KCM Wealth Management in Vancouver. But for many investors, putting money into specific stocks of fledgling green companies can feel too risky, says Mr. Mastracci. To diversify, investors can turn to a handful of mutual funds and exchange trade funds (ETFs) that provide broad environmental criteria among their investment screens, along with “pure-play” green portfolios that hone in on specific industries in solar, wind and other alternative energy industries.

Passively invested ETFs automatically put money into a basket of funds defined by an index. The companies that market these ETFs charge management fees at a fraction of the cost of the mutual funds, whose stocks are selected by professional money managers. The management expenses are subtracted from the return of the investment.

“ETFs are just cheaper,” says Larry Berman, chief investment officer at ETF Capital Management, who owns a couple of green-focused ETFs in his portfolio. “They give you the index and you don’t have to worry about volatility in individual stocks.”

The tradeoff is that an actively managed mutual fund may outperform the markets or reduce volatility in a portfolio in the long run, whereas an ETF will track only an index. And Mr. Berman notes that green ETFs tend to be a little more expensive than those that mimic broader indexes because they are more expensive to run.

Generally, more focused investments should make up a smaller part of your portfolio, says Dan Hallett, president of his Windsor-based research firm, Dan Hallett & Associates, Inc. “The more narrowly you zoom in on the market, the more volatility you are likely to experience,” he notes, but if you’re prepared for long-term investing, volatility isn’t inherently bad.


SOLAR ENERGY

ETFs focusing on solar power are especially hot. In April, New York-based asset manager VanEck Global Investors, which sells several green ETFs, launched the Market Vectors Ardour-Solar Energy ETF, with a management expense ratio (MER) capped at 1.09 per cent. It follows the Ardour Solar Energy Index, tracking companies that earn at least two thirds of their revenue from solar technology products. The companies must also have a market capitalization of at least $100-million, a limit that will include many small cap names.

The index favours bigger companies. Its largest constituent is Renewable Energy Corp. AS, a Norwegian company involved in the production of the wafers used in photovoltaic technology, most commonly in solar panels. First Solar Inc., a small-cap U.S. company that builds solar energy products, is weighted at more than 10 per cent in the ETF as well. The ETF holds a total of 34 names it trades on the American Stock Exchange (AMEX) with the memorable ticket, KWT.

VanEck’s ETF competes with the Claymore/MAC Global Solar Energy ETF, which tracks 25 international companies. Its mandate allows for companies that are less focused on the solar industry, however, but the top two holdings are the same. It’s MER is 0.65 per cent.



WIND POWER

Similarly, an ETF with the ticker FAN trades on the New York Stock Exchange. The First Trust ISE Global Wind Energy ETF invests purely in international wind-energy related technology companies. Vestas Wind Systems AS, a large-cap Danish wind turbine company takes a top spot in the portfolio of 52 publicly traded businesses with market capitalization of at least $100 million. Larger companies take a greater position in the portfolio.



CLEAN TECH AND ENERGY

In the United States, iShares offers the S&P Global Clean Energy Index ETF, based on a basket of international clean-energy related businesses tracked by Standard & Poors. The index of 30 stocks favours those with greater exposure to clean energy, which can include solar, wind, thermal and others. Again, Vestas Wind Systems is among the top holdings, along with First Solar, noted above. The ETF trades on the AMEX, and operates with an MER of less than 0.5 per cent.

The PowerShares Cleantech Portfolio, trading on the AMEX, casts a wider net. It invests in an index of 75 companies with market capitalization of between US$200 million and $1 billion. The businesses must report at least 50 per cent of revenues in clean energy technology. Siemens AG., the German industrial company that includes electrical energy generation as a business line, is the top holding. The fund reports an MER of 1.32 per cent.

Trading on the Nasdaq exchange is the First Trust NASDAQ Clean Edge U.S. Liquid Series Index ETF, with an MER capped at 0.6 per cent. It tracks the same industries, but narrows its investments to the United States.

Mr. Berman says he’s bullish on all these sectors, but they do have their risks. He says the investment theme isn’t new, and some of the stocks are already trading at relatively higher price to earnings multiples compared to the rest of the market.



GREEN MUTUAL FUNDS

Last month the HSBC Global Climate Change Fund entered a small field of mutual funds in the Canadian market that mix some of the riskier technology companies described above with well-known large-cap companies. The fund’s top 10 holdings include E.ON AG, the gas and electrical utility, and among the largest German companies.

Acuity Clean Environment Fund is similarly diversified, investing in the Canadian microcap solar-power tech company, 5N Plus Inc., along with a large-cap oil and gas miner and distributor SunCor Energy Inc.

Toronto-based investment company Criterion Investments sells two global mutual funds, the Criterion Global Clean Energy Fund and the Criterion Water Infrastructure Fund, which invests in a broader theme of water infrastructure, filtration and distribution. For example, the French consumer products company, Nestle SA is a major holding in the water portfolio owing to its bottled water sales. Each is managed by Swiss-based Pictet Asset Management.

“These large funds can go out and buy these multinational companies, most of which are relatively clean tech,” says Duncan Stewart, a portfolio manager who runs Duncan Stewart Asset Management Inc. in Toronto.

The funds are available for a minimum investment of $500, with MERs that range from 2.0 per cent and upwards if you buy them from advisers, who may charge one-time sales commissions as well.

Germany's Bioenergy Villages point way to distributed energy

When Thomas Edison invented electricity, he envisioned a system whereby electricity would be generated wherever it was to be consumed. In the USA, State-wide energy monopolies ended all that, as businessman accepted price controls (eg guaranteed profits) in exchange for becoming a monopoly power provider.

Germany is spinning the wheel and pointing to a decentralized, distributed energy future. this Wall Street Journal article has lessons for many small towns and villages across North America and the main one is: Work Together!

In Germany's Biofuel Villages, Power to the People rules

By MARY M. LANE, WSJ

OBERROSPHE, Germany—On Friday nights, villagers here pile into the town's only bar to play "Nail and Wood," a beer-fueled quest to pound a nail into an upright log with the most speed and accuracy. Later, they return home to warm cottages, fully heated by a wood-chip plant they built in 2008.

"We don't need fancy bar games, we've got wood," says 51-year-old Hans-Jochen Henkel, a spokesman for the 850-person town in western Germany and a member of the committee that helped raise funding for the plant. "And we don't need energy from large corporations. We've also got wood for that."

Long before the German government announced plans to phase out atomic power in the wake of the recent nuclear meltdown in Japan, dozens of villages across Germany, distrustful of mainstream energy sources, began generating their own heat and electricity from biofuels. Their goal was to free themselves from potential nuclear disaster and dependence on foreign oil, while uniting their communities through a greater sense of purpose.

"We don't want to be getting 3,050 liters of oil off some ship from Saudi Arabia," says Hans Bertram, a 72-year-old retiree living in Oberrosphe. This way, "the money stays here in the community."

Indeed, a desire to stimulate local economies, coupled with the security that comes from steady energy prices, are the main economic factors behind the movement, says Uwe Fritsche, a researcher at the Öko Institut, an ecology research center in Darmstadt.

The first of Germany's so-called bioenergy villages, the 750-person town of Jühnde in the central part of the country began as a large-scale experiment by scientists from the nearby University of Göttingen. The village started producing heat and electricity from liquid manure and locally grown energy crops in 2005.

Since then, about 70 other towns in Germany have become full-fledged "biovillages," meaning they use fuel derived from substances such as wood chips, crops and manure to heat their homes and generate electricity that they then sell to the local power grid. Some 14 other towns and villages are in the process of converting to other renewable-energy sources, such as wind and solar power, according to the Ministry of Agriculture.

Although these communities account for a small fraction of Germany's overall energy demand, and larger cities remain hesitant to convert fully to biofuels, the green villages "remain inspirational forerunners," says Mr. Fritsche.

Shaped like a thin rectangle with timber-framed houses built along a lush, sloping valley, Oberrosphe had to install more than 7,000 meters, or about 4½ miles, of heating pipes in order to convert to biofuel heat. The village voted that residents would pay a flat rate of €6,000, or about $8,650, to link to the new heating grid, regardless of their proximity to the wood-chip plant.

"We didn't want one family bearing a higher cost burden just because of where in the village they lived," says local resident Otto Krebs.

Oberrosphe built a wood-chip burner to produce heat for the 55% of households that initially joined the network and installed solar panels on top of the plant to generate power to sell to the local electric utility. The village plans to install a biogas plant in November to ensure it can meet the energy needs of all of its households. Many families hesitant about joining the co-op three years ago are in the process of joining now, despite having to pay €2,000 in back fees, says Mr. Henkel, the spokesman.

While the German government provides some funding for these projects—Oberrosphe received €1 million in government subsidies toward the €4.2 million in total capital it needed—the bulk of the financing falls to the local communities themselves.

Many residents say the investment has been well worth it.

Villagers in Oberrosphe estimate they save around €400-€500 annually on heating costs and even more when savings in maintenance costs to oil heaters are factored in. Jühnde residents, meanwhile, save as much as €900 per year in heating and maintenance costs, and the town makes about €1.1 million annually from selling electricity into the local power grid, says Eckhard Fangmeier, a town spokesman.

By contrast, German heating prices have gone up an average of 19% for gas and 94% for oil nationwide since January 2005, according to March statistics from Verivox.

Mr. Fritsche, the researcher, sees a revival of Germany's rural spirit in the proliferation of renewable-energy villages. "One of the drivers has been and continues to be involvement of the local people. It gives them a new identity and a new social interaction," he says.