Alternative Energy Funds Investment Performance Index

Alternative energy fund Investments have suddenly become the hot flavor for every single investor who wishes to gain from the ever growing demand of energy requirements. Here is an article about introduction to Alternative energy funds and their working.

However, the biggest question faced by any investor is how to analyze or measure the performance of their investment. That"s where the market index or market indices come into picture. In this article, we will discuss all the available market indices for the alternative energy sector and see how they can be used to track the performance of the alternative energy mutual funds or investments in alternative energy sector.

To begin with a basic introduction about alternative energy sector index, Alternative Energy Indices are the market index which are developed to monitor investment in alternative energy. They may include renewable energy and environmental technologies (usually called CleanTech), as well as transitional and alternative fuels such as nuclear power and natural gas. The world is looking towards generating energy from renewable energy sources and zero-emission fuels such as hydrogen.

The major indices in alternative energy segment on a global level are as follows:

ALTEX Global: This is one of the world"s largest Alternative Energy Index which tracks as many as 138 companies and has a market capitalization of $1.65 trillion USD. The primary focus is on pure play companies involved in the transition to diversified low-emissions energy infrastructure. Sub-sectors tracked are: low-emission utilities, renewables, natural gas, uranium, hydrogen, and clean energy technologies. It has given a profit of 34.7% returns in 2007 and has outperformed the MSCI Index, and the returns were delivered by Uranium and Gas securities.

 Ardour Global Alternative Energy Index:
There are 5 dedicated indices from Ardour for tracking the Alternative Energy Sector:
• Ardour Global Index (Composite) - (Ardour Composite) AGIGL – 128 constituents
• Ardour Global Index (Extra Liquid) - (Ardour XL) AGIXL – 30 constituents
• Ardour Solar Energy Index SOLRX – 34 constituents
• Ardour Global Index (North America) - (Ardour NA) AGINA – 70 constituents
• Ardour Global Index (EMEA) - (Ardour EMEA) AGIEM – 34 constituents

The above set of Alternative Energy Index from Ardour provide a comprehensive coverage of securities in the Alternative energy sector. Companies are involves in the following areas of focus: alternative energy resources (technologies for solar, wind, hydro, tidal, wave, geothermal and bio-energy); distributed generation technologies; environmental technologies including water and air quality; energy efficiency; and, enabling technologies including electronic, batteries, superconductors and advanced materials.

 Credit Suisse Global Alternative Energy Index CSGAE

The index comprises 30 global companies in five categories: Natural Gas, Wind, Solar, Bio-energy/Biomass, Geothermal/Hydropower/Fuel cells/Batteries. All five sectors will be capped to 20% to prevent individual sectors from dominating the Index. This would make the Credit Suisse Global Alternative Energy Index CSGAE as one of the most equally balanced index in the Alternative Energy sector.

 DAX global Alternative Energy Index

The DAXglobal Alternative Energy Index tracks the performance of 15 alternative energy companies. Companies which are selected for the index must generate more than 50 percent of their revenues in one of the following five sub-sectors: Natural Gas, Solar, Wind, Ethanol, Geothermal/Hybrids/Batteries.

 S&P Global Clean Energy Index

The S&P Global Clean Energy Index tracks 30 companies on a global basis which are involved in clean energy related business. The index is based on a diversified mix of Clean Energy Production and Clean Energy Equipment & Technology companies including a number of firms involved in wind and solar.

 Wilderhill New Energy Global Innovation Index NEX

The WilderHill New Energy Global Innovation Index is comprised of 86 companies worldwide whose innovative technologies and services focus on generation and use of cleaner energy, conservation and efficiency, and advancing renewable energy generally. Included are companies whose lower-carbon approaches are relevant to climate change, and whose technologies help reduce emissions relative to traditional fossil fuel use.
An independent Fund, the PowerShares Global Clean Energy Portfolio PBD, is available for investment which attempts to mirror the performance of NEX.

 World Alternative Energy Index WAEX

Managed by SocGen or Société Générale, the World Alternative Energy Index WAEX Index tracks the 20 largest stocks involved in: Renewable energy (solar, wind and biomass). Energy efficiency (better use of energy generation, which involves industries such as energy meters and superconductors). and Decentralized energy supply (power generation in close proximity to the consumer, involving micro-turbines and fuel cells). WAEX is an equally weighted benchmark, that is the weight of each member is set at 5% on quarterly basis.