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Legal & General environmental fund aims at low-carbon switch

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Legal & General is launching a global environmental enterprise tracker fund which aims to profit from the move to a lower-carbon economy.
The fund, which will launch on June 17, will be managed by Robert Dowling.

It will invest in 100 stocks that tap into three sub-themes including energy efficiency, low carbon energy production and water, waste and pollution control.

It will include pure-play companies, which include those where 50 per cent of their revenue is generated from one of these sectors.

L&G has partnered with Osmosis Investment Management on the fund, which will track the Osmosis climate solutions index.

There will be an annual charge of 125 per cent and trail commission of 0.4 per cent.

L&G managing director Simon Ellis cites a survey conducted by HSBC, which estimates the value of the low carbon energy market will grow from $740bn today to $2.2trn by 2020.

He says: “No more than $20bn has been invested in the area in the UK. It is a huge opportunity that is underinvested in by UK private investors.”

Yellowtail Financial Planning managing director Dennis Hall says: “I am not sure there will be a huge demand for such climate change products because the climate change label on its own does not really tell you what it is trying to do. It is likely to appeal to an investor looking for a fund in that specific area.”

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Readers' comments (1)

  • Really interesting that another big investment house is moving into this space. Maybe this is a sign that these products are becoming more mainstream. Just like 10 years ago, people involved in the green movement were considered outsiders - now they run councils and have an MP - they even make up coalition governments. Everyday i open the paper and see more news, droughts, floods, rising oil prices etc. Taking a long term view and investing in solutions for the future isnt flawed, it seems to be common sense. Afterall where else can one target long term growth from in the current environment.

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