The Neptune green planet fund will aim for growth by investing in a concentrated portfolio of companies focusing on reducing pollution, reducing the use of non-renewable materials and developing alternatives such as renewable energy.
The fund will be managed by head of research Chris Taylor, who manages the Neptune Japan opportunities fund. Taylor will invest in a best ideas portfolio comprising a range of different sized companies in different regions. He will focus on developed markets because most environmental research and environmentally friendly products emerge from these markets.
According to Taylor, the growth prospects for environmentally friendly companies are strong. He points out this sector of the market is expanding and unlike other sectors, growth will not be cyclical.
Socially responsible issues have become higher profile around the world in recent years. This can be seen by recent debate around carbon dioxide emissions from cars within the European Commission and the Kyoto agreement, which shows a commitment by over 160 countries to reduce carbon and greenhouse gas emissions.
European governments are encouraging technological developments in the areas of alternative energy generation and reduction of carbon emissions, while the US is looking at alternative energy sources to diversify its existing supplies. These factors should help the type of companies in which the Neptune fund will invest.
However, the fund will be investing in a relatively new sector, with some companies just starting to become profitable. This means that investors will need to be patient – Neptune says a three to five year view will be needed for investors to fully reap the rewards.