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Allianz unleashes eco-trends fund

Allianz Global Investors has made its RCM global eco-trends fund available to retail investors.

The fund was launched in January and is managed by Bozena Jankowska and Paul Schofield. It aims for growth by investing in the equities of companies that benefit from trends in eco-energy, pollution control and clean water.

Eco-energy refers to alternative energy and energy efficiency; pollution control covers environmental quality, waste management and recycling; while clean water includes water treatment and supply.

The fund is benchmarked against the Impax Environmental Technology ndex, which comprises the biggest environment technology companies around the world. It is not possible to invest directly in the index.

Reasons for growth in eco-energy include the increasing need to find alternatives to the limited supply of fossil fuels. This makes renewable energy such as wind and solar power, energy efficiency through lighting and insulation, and hybrid cars interesting investment opportunities.

Pollution control is seen as a growth area because the amount of waste around the world is growing faster than the population and this could create opportunities in air cleaning/filtering, recycling and industrial pollution control.

Finally, clean water is set to grow due to inefficiencies in supply such as decaying pipes. This creates investment opportunities in infrastructure-related areas such as pipes, pumps and water purification.

The fund can invest in companies of any size but a big proportion will go into smaller companies including early stage companies.

According to Allianz, firms providing solutions to environmental problems and companies that use their services will benefit from global eco-trends.

However, the structure of the fund limits when investors can sell shares could put some investors off. This interval closed-ended structure allows the fund manager to invest in smaller, potentially less liquid companies but the drawback is that investors may not be allowed to sell the number of shares they want at the time they want to sell. To provide liquidity in the fund for shareholders, quarterly offers to repurchase 5-25 per cent of the shares will be made but this may not be enough for some people.


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