Impax Asset Management ("Impax"), the specialist environmental investment manager, and FTSE Group ("FTSE"), the global index company, have signed an agreement to further develop the Impax Environmental Technology (ET50) Index. From December 2007, FTSE will take over the calculation and management of the index, which will be rebranded the "FTSE ET50 Index" and will be available for investors to use as the basis for structured products, ETFs and index funds.
Impax designed and launched the ET50 Index in 1999 to measure the performance of companies whose core business is in the development and deployment of environmental technologies. Impax chose FTSE to take responsibility for the calculation of the ET50 Index because of FTSE's proven indexing expertise and its commitment to providing investors with a set of responsible investment tools.
Ian Simm, Founder and Chief Executive of Impax, commented: "As one of the leading investment managers in the environmental sector, Impax has used the ET50 Index for over eight years as an informal benchmark of the sector's performance. We are now delighted to be able to partner with FTSE to strengthen the foundations of the index and to make it available to investors worldwide."
Will Oulton, Head of Responsible Investment at FTSE commented: "The environment is now a key issue for global investors, and by applying the FTSE methodology to the ET50 Index, Impax and FTSE will provide an investible and transparent measure of the performance of the environmental technology sector for pension funds and asset managers globally."
Please see below the latest ET50 update.
Impax ET50 Update London, October 3rd 2007
- The Impax ET50 index has experienced impressive growth over the quarter, rising 11.87%, against a backdrop of extreme market volatility.
- Demand in the solar sector has continued to drive company valuations with six of the top 10 companies in the index being solar technology companies and 36% of the index being comprised of solar names.
- Supportive legislation continues to drive demand for environmental technologies.
- Companies with exposure to the slowing construction sector have suffered on both sides of the Atlantic.
The top ten constituents of the Impax ET50 at the end of Q3 2007 are:
- 1. REC (solar, Norway)
- 2. Vestas (wind, Denmark)
- 3. Suzlon (wind, India)
- 4. Gamesa (wind, Spain)
- 5. First Solar (thin film solar, US)
- 6. Q Cells (solar, Germany)
- 7. LDK Solar (solar, China)
- 8. Solarworld (solar, Germany)
- 9. Suntech Power (solar, China)
- 10. Novozymes (biofuels, Denmark)
The Impax ET50 (ET50) is a proprietary performance-tracking index dedicated solely to publicly quoted companies that have core businesses in the development and operation of environmental technologies. It lists the 50 largest pureplay public environmental companies. From December 2007 the full list will be available under license from FTSE.
Impax ET50 Entrants
The six new entrants to the ET50 are as follows:
- Everlight (LEDs, Taiwan)
- Sims Group (metals recycling, Aus)
- Solon (solar, Germany)
- Sunpower 'A' (solar, US)
- Miura (energy efficiency, Japan)
- Tanfield Plc (zero emission vehicles, UK)
Commentary from Bruce Jenkyn-Jones, Director of Investments, Impax Asset Management:
"The rapid and sustained growth in demand in the solar industry see Solon and Sunpower 'A' shares enter the ET50. While there has been significant volatility in the markets generally, the solar sector has continued to perform strongly. In addition, we have seen isolated M&A activity driving valuations in recent weeks, with Sims Group benefitting from a combination of organic growth, strong scrap pricing in the steel market and the well-received news that it has tabled a bid for US steel recycler Metal Management. The transaction looks likely to create the world's largest scrap steel recycler.
Elsewhere, Everlight also returned to the ET50, evidence of the continued growth in the LED space and in emerging Asian markets, while Tanfield Plc enters the index thanks to an equity placing and strong results from its powered access division in the last month of the quarter.
The growth in the global environmental markets continues, with solar companies now accounting for 36.7% of the index. For the second successive quarter, when rebalancing the index, REC, the largest constituent in the ET50, was adjusted to 10% in accordance with the rule that no company represents more than 10% of the index. This is the second time the company has been adjusted down since prior adjustments to Vestas and Ballard in 2000/2001."
Impax ET50 Exits
Mueller Water Products (water infrastructure, US), Watts Water (water infrastructure, US) and NIBE (heat pumps, Sweden) left the index during the quarter, following weakening data from both the US new-build housing market and softening European domestic markets. Performance issues and a profit warning saw Clipper Wind (wind turbines, UK) exit the index, while delays with UK supermarket group Tesco impacted Tomra (recycling, Norway). The other exit from the index was Climate Exchange (carbon, UK) which suffered during the heightened volatility in the markets during the quarter.
Impax Asset Management