NYSE Euronext and research company Bloomberg New Energy Finance (BNEF) have jointly launched three new sector-focused global clean energy stock indices.
The new indices will allow investors to track in unprecedented detail the quoted companies most involved in the world’s historic shift to low-carbon energy.
The three new sector indices cover solar energy, wind power and energy smart technologies (EST).
The solar index covers the entire value chain from polysilicon makers to photovoltaic project developers, the wind index everything from turbine component makers to wind farm builders and operators and the EST index everything from battery makers to suppliers of demand response systems for the electricity network. Each index is based on a basket of between 70 and 200 companies, quoted on different stock markets around the world, with a minimum threshold exposure to the relevant renewable energy or energy smart technology sectors.
The sectoral indices launched today are designed to act as a complement to the three regional clean energy indices launched late last year by NYSE Euronext and BNEF.
“The new indices accurately weight each company’s economic exposure to its sector and so provide a more granular way of tracking changing valuations in this fast-moving industry,” says George Patterson (pictured), managing director of European indices at NYSE Euronext Global Index Group, “NYSE Euronext has been involved in developing and calculating clean energy equity index products for the better part of a decade. Together with Bloomberg NEF we hope to see ETF providers using the solar, wind and EST indices as their basis for new products for investors that want a pooled, rather than stock-specific exposure, to these sectors.”
Michael Liebreich, chief executive of Bloomberg New Energy Finance, says: “These indices draw on the deep research our analysts have done over many years into value chains of these complex sectors. Many stock market investors may be somewhat familiar with the solar and wind industries, but they may not appreciate the wide range of companies involved, from material and component makers, to sub-assembly and final equipment manufacturers, from advisors to project developers. Trends become clearer when you look at all these activities.
“As for EST, this covers a complex set of technologies that will be absolutely key to the world’s chances of reducing emissions in the next 40 years, and we believe investors will benefit by understanding the different pieces – including smart grid, building and industrial efficiency, electric vehicles and power storage. Our analysts helped to define these sectors over the past five years, and we and NYSE Euronext strongly believe these indices will help to improve the market’s knowledge of them.”
Bloomberg New Energy Finance decided to partner with NYSE Euronext, to benefit from the latter’s expertise in indices and exchange-traded funds. “We look forward to working together on indices that will help to improve the market’s knowledge of these sectors,” Liebreich says.