The poor performance of some sectors aiming to slow climate change is pushing money managers to cast further afield for investments that both carry green credentials and are likely to post better returns.
Some renewable-energy stocks, such as those in solar and wind industries, have fallen spectacularly in recent years, belying hopes that they were poised to break out.
Money managers say this poor performance is due in part to a lack of hoped-for policies to help these industries grow. As a result, say the managers, they are looking at other areas of the market that are part of the climate-change story, such as recycling and energy efficiency. EveneBay Inc., as a promoter of reusing goods, fits the bill.
"Nobody's questioning the long-term prospects, market share or gains of [renewable energy] sectors, but over the medium [term], it's not been that good," said Vipin Ahuja, manager ofAllianz RCM EcoTrends Fund (trading symbol AECOX). "So people are looking elsewhere for sustainable stories for the next couple of years."
Mr. Ahuja's fund, which he joined about one year ago, is down 19% a year in the past three years, according to data from Morningstar Inc.
The deteriorating prospect for new policies to combat climate change was palpable at the recent United Nations Climate Change Conference in Cancun, where delegates from nearly 200 countries met to hash out a possible extension of the Kyoto Protocol and other policies. The more sober atmosphere this year, particularly compared to the gathering's predecessor in Copenhagen, reflected toned-down hopes that the world's largest polluters would reach agreement on policies to combat global warming and promote renewable energy.
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