Green Alpha Next Economy Index Achieves Ten-Year Milestone
The Next Economy Index’s strong track record demonstrates that climate change-focused, innovation-driven investing offers an effective way to preserve and create wealth.
Green Alpha Advisors announced in early January that its Next Economy™ Index celebrated its ten-year anniversary on December 31, 2018. The Green Alpha Next Economy Index is an actively-researched, passively-managed investment strategy designed to reflect the innovation-driven sustainable economy. The strategy currently holds 115 publicly traded companies, all of which create or enable solutions to systemic risks like climate change.
Since its inception in 2008, the Next Economy Index has returned 10.20% annualized to clients, net of fees versus the MSCI All Country World Index IMI of 10.64%. The Index is offered to clients as a Separately Managed Account (SMA) and is available on 15 custodial platforms.
“We developed our Next Economy investment process from scratch because a marginally greener version of ‘business as usual’ economics is unworkable, and our holdings reflect that,” said Garvin Jabusch, Co-Portfolio Manager. “Rather than building our investment universe from an index fund—which would represent the old economy—we look to where the economy is heading and invest accordingly.”
The Next Economy Index exists to:
• provide clients with an avenue to decisively allocate their stock holdings away from the downside risks associated with climate change, resource degradation, widening inequality, and other systemic risks,
• enable portfolio growth from exposure to rapidly expanding solutions to those risks,
• demonstrate the diversity, growth, breadth and depth of the emerging Next Economy,
• and serve as the universe of stocks from which Green Alpha’s Investment Committee can select to create the firm’s actively-managed Next Economy portfolios.
“The Next Economy opportunity set has never been clearer. There are companies that are at the tipping point of dominating an entire industry like energy, yet they are trading at or below book value,” said Jeremy Deems, Co-Portfolio Manager.
“The market has witnessed a spike in demand for sustainability-driven portfolios over the last few years, but many of the products out there are still pretty new,” said Chief Operating Officer, Betsy Moszeter. “We’ve been putting our Next Economy thesis to the test for ten years, and our portfolio managers have been building fossil fuel free portfolios together since 2002. I feel confident that we are offering time-tested, high-quality portfolios to all of our clients—from institutions to individual retirement accounts.”
About Green Alpha Advisors, LLC
Green Alpha Advisors (https://greenalphaadvisors.com) is led by three pioneering executives who each have 20+ years of asset management experience. Green Alpha has been redefining asset management since 2007 by investing in the Next Economy – an indefinitely thriving economy driven by companies that are developing innovative solutions to major systemic risks, like climate change, resource degradation and scarcity, and widening inequality. As these threats continue to materialize, and risk-mitigating solutions rapidly develop, the economy of the next decade is unlikely to look like that of the past. It’s time to invest in what’s next. Green Alpha manages $130 million in client assets, primarily through financial advisors, family offices, and institutional consultants.
Green Alpha’s investment philosophy is straightforward: always invest in the solutions to global systemic risks, never in the causes. That’s investing in the Next Economy.
This press release is for informational purposes only and nothing in this press release should be construed to be individual investment advice, nor an offer to sell or the solicitation of any offer to buy any security. Green Alpha Advisors, LLC is a registered investment advisor. Registration as an investment advisor does not imply any certain level of skill or training. Green Alpha is a registered trademark of Green Alpha Advisors, LLC. Green Alpha Advisors also owns the trademarks to “Next Economy” and “Investing in the Next Economy.” Please refer to www.greenalphaadvisors.com for more information and additional important disclosures.
Performance data quoted represent past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Investment returns and principal will fluctuate with market and economic conditions and investors may have a gain or loss when shares are sold.
All performance and characteristics data are sourced from Bloomberg Finance L.P. The Next Economy Index may invest in companies with small and medium market capitalizations, which may have more limited product lines, markets and financial resources than larger companies. In addition, their securities may trade less frequently and in more limited volume than those of larger companies. Small or mid-cap stocks may be more volatile than those of larger companies and, where trading volume is thin, the ability to dispose of such securities may be more limited. The Next Economy Index may also invest in foreign domiciled companies. Investing in foreign securities may involve additional risks, including exchange-rate fluctuations, limited liquidity, high levels of volatility, social and political instability and reduced regulation. Emerging markets are often more volatile than developed markets, and investing in emerging markets involves greater risks. International investing may not be suitable for everyone. An investment in the Next Economy Index should be considered a long-term investment.
The MSCI ACWI Investable Market Index (IMI) captures large, mid and small cap representation across 23 developed markets and 23 emerging markets countries. With over 8,600 constituents, the index is comprehensive, covering approximately 99% of the global equity investment opportunity set. Investors cannot invest directly in this index.