Legal & General Investments is to launch a fund on June 16 investing in a global environmental stockmarket index.
The Global Environmental Enterprise fund will be managed by Robert Dowling and will invest in 100 stocks relating to what Simon Ellis, the managing director at Legal & General Investments, describes as the “next mega-trend.”
The fund will focus on three environmental sectors, namely energy efficiency, low carbon energy and water, waste and pollution control. The index will be reviewed every six months but it is expected to retain a relatively even spread across all three areas.
Companies selected for inclusion must derive a majority of their earnings from at least one of these three sectors. The fund will not include large cap firms such as General Electric and Siemens.
L&G cites a survey conducted by HSBC, which estimates the value of the low carbon energy market will grow from $740 billion (£452 billion) today to $2.2 trillion by 2020.
Ellis describes the environmental sectors as “the least invested in and possibly the least understood. It is the next ’mega-trend’ for investment.”