NYSE Euronext Indices and Bloomberg New Energy Finance have re-branded their family of clean energy indices to better represent the involvement of both NYSE and Bloomberg. The family is now known as NYSE Bloomberg Clean Energy Indexes.
NYSE Euronext and Bloomberg are set to launch a new index tracking companies involved in electric vehicle development.
The indices were launched in April last year and are based on Bloomberg New Energy Finance’s database of organisations involved in clean energy and related sectors. The database includes more than 1,000 listed companies with at least 10% or more of their activity in clean energy.
The family currently comprises six indices focused on regions, including Asia, EMEA and the Americas, and specific clean energy sectors, such as wind, solar and smart technologies. The indices were designed with exchange-traded funds (ETFs) very much in mind, though as yet none has been adopted by an ETF provider.
George Patterson, managing director European indices at NYSE Euronext Indices, said: “The NYSE Bloomberg index family has proven to be a valuable addition to the NYSE Euronext Indices portfolio, providing a solid foundation for tracking the economic exposure for clean energy initiatives, including the Bloomberg brand into the name will offer greater exposure for these innovate products.”
Jon Moore, chief operating officer of Bloomberg New Energy Finance, added: “This group of indices has already shown its value to investors in highlighting the different geographical and sector trends going within a global clean energy industry that is now large and diverse. For instance, in the last year, the NYSE Bloomberg Americas Clean Energy Index and the NYSE Bloomberg Global Energy Smart Technologies Index have out-performed the other four sector and geographical indices. Meanwhile, the NYSE Bloomberg Global Solar Energy Index, which was the weakest performer for most of last year, hit a low in late November 2012, and has since rallied by no less than 35%.”
The indices are fully investable and weighted by modified market cap using Bloomberg New Energy Finance’s proprietary rating system to determine a company’s exposure to the relevant sector.
The three sector indices are:
NYSE Bloomberg Global Wind Energy Index (ticker: WIND)
Comprises companies active along the wind energy value chain, including the manufacture of generating equipment and the financing, development and operation of wind projects.
NYSE Bloomberg Global Energy Smart Technologies Index (ticker: EST)
Comprises companies active across the advanced transportation, digital energy, energy efficiency and energy storage sectors.
NYSE Bloomberg Global Solar Energy Index (ticker: SOLAR)
Comprises companies active along the solar energy value chain including the manufacture of photovoltaic and solar thermal components and equipment and the financing, development and operation of solar projects.
The three regional indices are:
NYSE Bloomberg Asia Pacific Clean Energy Index (ticker: CLEANAPA)
NYSE Bloomberg Europe, Middle East and Africa Clean Energy Index (ticker: CLEANEME)
NYSE Bloomberg Americas Clean Energy Index (ticker: CLEANAME)
Each of the above regional indices comprises a basket of between 125 and 325 companies with exposure to renewable energy and energy-smart technologies. These industries have seen rapid growth in capital spending – with global new investment in clean energy reaching $269bn in 2012, more than five times the figure of eight years earlier – but also sharp shifts in market share and geographical profile.
NYSE Euronext and Bloomberg have confirmed that a new index tracking the shares of companies involved in electric vehicle development will be added to this family in the coming months.
While the indices have all the right credentials to make great underlyings for ETFs, it may require a renewed surge of investor interest in the sector before new ETFs using these indices are launched. With many existing US and European-listed clean energy products only having modest assets under management, it could be some time before ETF providers are driven to launch new products in this space. That said, the emerging ETF industry in Asia could prove more fertile territory, as start-up ETF providers look to build out their offerings.
Within Europe, existing clean energy ETFs include the PowerShares Global Clean Energy ETF (PSBW), the Credit Suisse Global Alternative Energy ETF (CSAE), the iShares S&P Global Clean Energy ETF (INRG), the ETFX DAXglobal Alternative Energy ETF (ALTE), the Amundi Green Tech Living Planet ETF (AWWF), and the EasyETF FTSE Environmental Opportunities 100 (UET).