Green themes fund eyes U.S., China

Sydinvest Klima & Miljo fund shifts toward renewables, adding Fuel Systems Solutions, eyeing Chinese wind power, trimming Cameco, and focusing on U.S. and China stimulus-driven clean energy, portfolio diversification, and MSCI World-relative performance.

U.S. and Chinese economic stimulus measures are likely to focus on energy efficiency and renewable energy, according to fund manager Sydinvest, which took a stake in a U.S. alternative fuel components company last month.

Sydinvest said it bought shares in Fuel Systems Solutions for its $10-million "green themes" Klima & Miljo fund, as large investors weigh ecological risks across portfolios, while reducing its holding in Canadian uranium miner Cameco.

"We expect new nuclear power plants to be built in the United States and China but also that new technologies will dampen growth in uranium exploration," Sydinvest said in a monthly fund performance report.

"Our focus is on the United States and China amid China's clean-tech moon shot trends because we expect that big parts of the stimulus packages in both countries will be spent this year and next," it said.

Citing growing expectations regarding Chinese demand for wind turbines and falling carbon emissions as producers move away from coal, Sydinvest Klima & Miljo said: "Our likely next step is to increase our investments in Chinese wind park operators and wind turbine manufacturers."

It did not mention any potential target companies.

The Sydinvest Klima & Miljo fund's exposure to China grew to 8.5 percent of assets by end-February from 3.3 percent at end-2008.

The United States, where renewable energy is high on President Barack Obama's agenda and where UN climate deal winners could benefit, accounts for 28 percent.

The fund recorded a negative return of 1.6 percent in the first two months of the year compared with a decline of 3.3 percent for the MSCI World index, its benchmark, even as energy efficiency is outpacing renewables in sector performance during the same period.

However, the fund's calendar 2009 return of 5.1 percent paled in comparison with the benchmark's 31.5 percent advance.

The top three holdings at end-February were German engineering conglomerate Siemens with 3.8 percent of assets, Spain's Iberdrola Renovables with 2.7 percent and French Veolia Environment with 2.3 percent.

In February Sydinvest also added to its stake in power utility Energias de Portugal, which is now the Klima & Miljo fund's seventh biggest holding with 2 percent of assets.

Related News

• Electricity Forum News

• Climate Change News