Source: http://news.www23.ninemsn.com.au/article.aspx?id=295130
Macquarie Bank Ltd and ratings and research firm RepuTex have joined forces to develop a carbon listed equities fund with a portfolio of stocks best able to deal with the risk to earnings posed by initiatives to cut carbon emissions.
RepuTex assesses and maintains carbon ratings on each company in the S&P/ASX300 index, identifying stocks it considers best able to adapt and compete in a carbon-constrained environment.
The proposed fund will use this methodology to price the impact of carbon risk on a company's bottom line, with Macquarie using this as the key driver for stock selection.
Macquarie executive director Anthony Abraham said climate change is no longer purely an environmental issue - it's also a significant investment opportunity.
"RepuTex's analysis shows that climate change and the carbon agenda have had an impact on company earnings globally and that this is likely to become more significant in Australia as the proposed Emissions Trading Scheme (ETS) is phased in," he said.
"What we are looking at is bringing in the environmental issue - not as a social issue - but as an economic one, and to give people the fund portfolio outcome that is attributable to that."
RepuTex said the companies considered best positioned for growth are selected for inclusion in RepuTex's Climate Change Growth Index (CCGI).
The CCGI currently consists of 47 Australian companies including BHP Billion Ltd, Rio Tinto Ltd, Mirvac Group and AGL Energy Ltd.
RepuTex head of research Hugh Grossman said he is looking at companies that have invested in technology as part of the their core business.
"In the coal industry, we are looking at companies that have invested in technology and overlay that as part of the their core business," Mr Grossman told AAP.
"BHP and Rio have spent a lot of money in terms of piloting programs in terms of clean coal.
"As we move towards carbon trading, we are seeing some companies already open up (trading) desks, such as NAB (National Australia Bank) and Origin (Energy) are two that have done that."
Mr Abraham said he has received "promising feedback" from institutional investors about the fund but details are yet to be decided upon.
"Our approach is still being finalised as we talk to our institutional clients about what they are looking for," he said.
Macquarie currently plugs an alpha model, whereby it uses traditional financial research looking at seven factors when considering a company's performance.
Mr Abraham said that will still be the case but he will start with the RepuTex screen of 47 companies and then apply the other screens.
Mr Grossman said the CCGI index is re-balanced quarterly but the structure on how it is actively managed is up to Macquarie.
RepuTex, Mac Bank set up carbon fund JV
RepuTex, Mac Bank set up carbon fund JVSource: http://news.www23.ninemsn.com.au/article.aspx?id=295130
Macquarie Bank Ltd and ratings and research firm RepuTex have joined forces to develop a carbon listed equities fund with a portfolio of stocks best able to deal with the risk to earnings posed by initiatives to cut carbon emissions.
RepuTex assesses and maintains carbon ratings on each company in the S&P/ASX300 index, identifying stocks it considers best able to adapt and compete in a carbon-constrained environment.
The proposed fund will use this methodology to price the impact of carbon risk on a company's bottom line, with Macquarie using this as the key driver for stock selection.
Macquarie executive director Anthony Abraham said climate change is no longer purely an environmental issue - it's also a significant investment opportunity.
"RepuTex's analysis shows that climate change and the carbon agenda have had an impact on company earnings globally and that this is likely to become more significant in Australia as the proposed Emissions Trading Scheme (ETS) is phased in," he said.
"What we are looking at is bringing in the environmental issue - not as a social issue - but as an economic one, and to give people the fund portfolio outcome that is attributable to that."
RepuTex said the companies considered best positioned for growth are selected for inclusion in RepuTex's Climate Change Growth Index (CCGI).
The CCGI currently consists of 47 Australian companies including BHP Billion Ltd, Rio Tinto Ltd, Mirvac Group and AGL Energy Ltd.
RepuTex head of research Hugh Grossman said he is looking at companies that have invested in technology as part of the their core business.
"In the coal industry, we are looking at companies that have invested in technology and overlay that as part of the their core business," Mr Grossman told AAP.
"BHP and Rio have spent a lot of money in terms of piloting programs in terms of clean coal.
"As we move towards carbon trading, we are seeing some companies already open up (trading) desks, such as NAB (National Australia Bank) and Origin (Energy) are two that have done that."
Mr Abraham said he has received "promising feedback" from institutional investors about the fund but details are yet to be decided upon.
"Our approach is still being finalised as we talk to our institutional clients about what they are looking for," he said.
Macquarie currently plugs an alpha model, whereby it uses traditional financial research looking at seven factors when considering a company's performance.
Mr Abraham said that will still be the case but he will start with the RepuTex screen of 47 companies and then apply the other screens.
Mr Grossman said the CCGI index is re-balanced quarterly but the structure on how it is actively managed is up to Macquarie.
