Clean energies are the cornerstone on which to build a better future. It will not be possible to achieve the objectives set out in the Paris Agreement or in Agenda 2030 for Sustainable Development to their full potential without renewable energies being able to replace fossil fuels.
Investors around the world have shown a growing interest in clean energy over the last decade. According to the ‘Global Trends in Renewable Energy Investment 2019’ report, which follows trends and opportunities in the sector since 2004, global investment in renewable energy capacities reached $272.9 billion in 2018, above investment in new fossil fuel generation. Last year was the fifth consecutive year during which investment in renewable energy exceeded $250 billion.
Individual investors can contribute to this energy transformation through investment funds that invest in companies that focus their activity, directly or indirectly, on the generation of clean energy.
From this group of funds, a selection has been made of the highest rated, five or four stars of VDOS. Of these, the best profitability figure corresponds to the BGF Sustainable Energy fund with a revaluation of 27.7% in the year, in its A2 class in euros. Its one-year return is 21%, with a controlled volatility of 16.2%, which places it among the best in its category for this concept, in the fifth quintile. At least 70% of the net assets in its portfolio correspond to equity securities of companies operating in companies related to new energies. These are companies linked to energy technologies and alternative energies: developers of renewable energies, alternative fuels, energy efficiency or facilitation of energy supply and infrastructures. Its major positions include shares of Nextera Energy (6.55%), EDP Renováveis (5.29%), Enel (5.21%), Schneider Electric (4.42%) and Vestas (4.11%). The subscription of this fund requires a minimum contribution of 5,000 dollars (approximately 4,536 euros) and applies to its participants a fixed fee of 1.75% and a deposit fee of 0.45%.
The Guinness Alternative Energy Fund earns 21.5% in its Class C accumulation in euros for the year from the British fund Guinness Asset Management. In the last annual period, its return was 16.5%, with a cost controlled by volatility of 20.8%. It provides exposure to global renewable energy markets. A sector that, in the manager’s opinion, will benefit from the combined effects of strong growth in demand and the improved economics of renewable energy supply, as well as public and private support for low-carbon technologies. Its portfolio includes shares in Xinyi Solar (4.2%), Daqo New Energy (4%), Huaneng Renewables (3.8%), Ormat Technologies (3.8%) and Schneider Electric (3.7%). A minimum of 1,000 euros is required to subscribe to the euro accumulation class C of this fund, which charges its participants a fixed commission of 1.5%.
The Long Term Investment Fund (SIA) – Natural Resources euro class has achieved a return of 7.3% since January, although one year later it has not been able to achieve a positive return (-3.5%). In this last period it recorded a volatility figure of 25%. In order to obtain long-term capital appreciation, it invests mainly in natural resource-related equities around the world. A sector that includes, among others, the production, extraction, refining and marketing of natural resources. Referenced to the S&P Global Natural Resources Net TR EUR index, it includes among its largest positions shares of Ivanhoe Mines (4.6%), Grieg Seefood (4.5%), Norsk Hydro (4.3%), Leroy Seafood Group (4.1%) and Premier Oil (4%). It charges its participants a management fee of 1.5% and a deposit fee of 0.5%, in addition to a variable fee of 15% on the fund’s positive annual results.
Renewable energies are firmly integrated into the power generation sector, although they represent only 26.3% of the total electricity produced. However, fossil fuel subsidies, which reach hundreds of billions of dollars each year, are slowing the process of transition to renewables.
On the other hand, 1.1 billion people lack access to electricity. Getting these people to have access to electricity through technologies such as solar would be a breakthrough for the Sustainable Development Goals (SDOs). In order to move towards clean energy generation, smart policies are needed that really value the economic and social benefits that renewable energy can bring.