Merrill Lynch has added the global alternative energy fund to its Mercury Selected Trust (MST) range.
This Luxemburg-based Sicav invests in companies around the world that are involved in the development of alternative sources of energy, such as wind power, solar power and the hydrogen fuel cell.
The hydrogen fuel cell is a renewable energy source that is like a battery that runs on oxygen and hydrogen. It produces electricity and heat and is currently being researched by organisations such as NASA.
Finding different forms of energy is important because the supply of fossil fuels, which are the main source of power, is limited and cannot be replaced. However, while the technology needed to make them more efficient is still being developed, alternative energy will be more expensive than traditional sources.
For this reason, alternative energy may not catch on as quickly as investors would like. The fund may be more suitable for experienced investors who already have a diverse portfolio, but who want to add a highly specialist sector fund that has environmentally friendly objectives.
According to Standard and Poor's. the Merrill Lynch energy international fund is ranked 2 out of 3 funds based on £1,000 invested on a bid-to-bid basis with gross income reinvested over three years to May 2001.