Merrill Lynch Investment Managers is getting plugged into the world of
heat, light and water with the world utilities fund.
Based in Luxemburg, world utilities is a Sicav aimed at investors looking
for a low to medium-risk fund. It will invest in companies that supply
electricity, water and gas. It will also target companies that are involved
in new energy technologies such as wind power, solar energy, coastal
barrages and small microturbines.
Half the fund will invest in the US, with 20 per cent in Europe, 20 per
cent in Asia and 10 per cent in Latin America.
The fund will be managed by Walter Rogers in New York. He joined Merrill
Lynch in 1987 and has been managing the Merrill Lynch utilities and
telecommunications fund since 1990.
Deregulation is affecting utility companies all over the world as
governments loosen their grip on the energy and water sectors. Utilities
can be a safer investment during times of market volatility as they tend to
be driven by increasing demand and by internal developments such as mergers
of utilities providers. But recent events such as power blackouts in
California have shown that deregulation can go too far and may represent
too big a risk for some investors.
According to Standard & Poor's the Merrill Lynch energy fund is ranked
fourth out of five funds in its sector, based on £1,000 invested on a
bid-to-bid basis with gross income reinvested over three years to April 16,