DUESSELDORF (dpa) – It’s the best of two worlds – earning money while keeping a clean conscience. That’s why the market for “green” shares and ecology investment funds is booming in Germany.
At the end of 1998, the volume of money invested in such funds came to around 600 million marks (260 million dollars). At the end of 2000, the figure had risen five-fold to some 3 billion marks.
This is admittedly small by comparison to the 66 billion marks which last year went into investment funds. But in view of rising oil and natural gas prices, investors are increasingly warming to the possibilities of investments in the area of alternative energy.
“Eco-funds are in demand like never before and are going to gain further in importance,” predicts Thomas Bieler of the consumer affairs office in Duesseldorf, capital of the state of North Rhine Westfalia.
He reports that the type of investor which is interested in the ethical aspects of an investment has strongly changed in the past few years.
“In the 1980s this form of investment was still regarded as something exotic,” Bieler said. “It was accepted that the yields would be thinner than with other types of investments.”
But these times are apparently over. Last year an entire range of ecology-oriented funds achieved a high improvement in their value. For example, the Focus Umwelttech Fond thrilled investors by growing almost 100 per cent.
Then there was the Oekovision Fund run by the environmentally- focussed bank Oekobank, which grew in value by 40 per cent last year.
Because high-tech and dot-com shares have recently been in the headlines due to plunging values and bankruptcies, environment- oriented investment forms have been developing into a well-respected alternative, analysts say.
The nature-oriented shares index Nax, launched in April 1997 as a listing of 20 companies around the world which are all in the vanguard of environmental know-how, was scarcely affected by the international stockmarket nosedive over the past 12 months.
The general catastrophic mood on world stockmarkets did prevent major upward growth, but still, by comparison with the German share index DAX or the Dow Jones Index on Wall Street, the Nax performed well above average.
The conditions for a share to be listed on the Nax are tough. Besides annual turnover of at least 100 million marks, a candidate company must either produce alternative energy, recycling systems or natural medications.
Some ecological funds are less choosy in their search for buy-ins or stock investments. Even shares of car companies are accepted – so long as the company makes some cars with a fuel consumption of less than three litres per 100 kilometres (about 50 miles per gallon).
But there is no fixed standard for choosing a share to be invested in.
And analysts caution that the rising number of financial products bring with them some risks.
Consumer protection expert Bieler warns about some funds disguise themselves as being environment-oriented but are not. Because eco- funds have been succeeding, some black sheep are trying to move into their territory.
Bieler therefore advises investors to study exactly the types of shares which an investment fund is buying into. Investors should become wary when funds promise “dream profits” without providng any warning about the risks involved.
