Boulder, Colorado (April 15, 2015) – Green Alpha ® Advisors, an asset management firm specializing in innovation-driven, fossil fuel free equity portfolios minimizing economic risks associated with climate change and resource scarcity, announced today that its Green Alpha Next Economy Index (GANEX) was up 3.51% for Q1 2015, outpacing the S&P 500, which rose 0.95%, and the MSCI All Country World Index, which was up 2.72% for the period.
The GANEX, established December 30, 2008, is the oldest broad-based, fossil fuel free market index in the U.S., providing investors with a critical benchmark of investment performance through different market cycles. The market cap-weighted index of currently approximately 82 securities has generated 106.36% in cumulative total returns since inception. Please see the chart on page two for more complete performance history information, including comparison data.
“Throughout the first quarter of the year, volatility in the oil markets, along with continued geopolitical risk, concerns over global growth in Europe and Asia and uncertainty regarding interest rate increases drove a shift towards a stock picker’s market,” said Jeremy Deems, co-portfolio manager.
As of quarter-end the GANEX portfolio holdings have an average Price to Book ratio (P/B) of 2.49 vs. the S&P 500 average P/B of 2.85. Contrast that to the earnings growth potential of GANEX. The 2015 full year earnings per share growth over 2014 for GANEX is currently 32.79% vs. just 4.56% for the S&P 500, some eight times higher. Our projected 2015 over 2014 sales growth for the portfolio is 14.88% vs 7.19% for the S&P 500.
Some key balance sheet characteristics of companies that comprise the GANEX include an average Long-Term Debt to Equity of GANEX portfolio is 38.21 vs. that of 76.15 for the S&P 500. A significantly lower leverage position. In addition near term liquidity looks very strong as well, with GANEX holdings averaging a current ratio of 3.11 vs 1.89 for that of the average S&P 500 holding. To summarize, GANEX consists of well-managed, financially sound companies whose innovative products and services represent solid growth opportunities.
ABOUT THE GREEN ALPHA NEXT ECONOMY INDEX (GANEX)
Traditional, bottom-up research paired with a compelling, macro-economic growth thesis based on scientific, demographic and climate trends. Green Alpha begins the investment process by asking, “Does a company, in aggregate, contribute to or mitigate the systemic risks of resource scarcity, climate change or population growth?” The resulting list of Next EconomyTM candidates are then vetted using time-tested growth and valuation methodologies.
The GANEX is an indexed-product designed to reflect and benchmark the Next Economy. It exists to:
- Define all aspects of the Next Economy; green, self-sustaining, eco-efficient, fossil fuel free
- Demonstrate the diversity, growth, breadth and depth of the Next Economy
- Provide a universe of Next Economy companies from which to draw for actively managed portfolios
- Serve as a performance benchmark for sustainable active, public equity investment strategies
All data as of March 31, 2015. This summary is for informational purposes only. Portfolio returns are net of fees, and past returns are no indication of future results. All data is based on the GANEX Model Portfolio, net of management fees of 0.60% annually. The contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The SPDR S&P 500 ETF (ticker SPY) is used to represent the characteristics of the S&P 500 Index. MSCI ACWI IMI = MSCI ACWI Investable Market Index. Data cited throughout this document was sourced from Bloomberg Finance L.P. Green Alpha Advisors, LLC is a registered investment advisor.
None of the information contained here constitutes a solicitation, offer, opinion, or recommendation by Green Alpha Advisors, LLC to buy or sell any security, or to provide legal, tax, accounting, or investment advice or services regarding the profitability or suitability of any security or investment.
ABOUT GREEN ALPHA ADVISORS, LLC
Green Alpha Advisors is an asset management firm, founded in 2007, on the belief that in order to live and thrive on our planet indefinitely we must make an inevitable economic and technological transition to sustainability. Our brand of environmentally-focused, green investing is not an asset class. Rather, it is a vision for how the global economy must evolve to operate in an environmentally sustainable world, and a method of investing risk-averse capital for the long-term.
Betsy Moszeter, 303-993-7856 or firstname.lastname@example.org