New opportunities for green investment emerge Launch of two ways to invest in the environment
20 June 2011
Two new investments have launched this week aimed at tackling climate change as well as making you a profit.
Legal & General has launched its Global Environmental Enterprises fund, while renewable-energy company Wind Prospect Group has released a corporate bond to build wind turbines.
Tackling the environment with Legal & General
The Global Environment Enterprises fund is a unit trust which will only invest in companies that are profiting from finding ways to tackle dwindling natural resources around the world and an ever-changing global climate.
The companies have to make 50% of their revenues from three key themes:
- Energy efficiency
- Low carbon energy production
- Water, waste and pollution control
Interestingly, the Legal & General fund has been launched as a passive 'tracker' fund. It will track the Osmosis Climate Solutions Index, which only includes companies that meet this environmental criteria. The index consists of 100 companies.
However, it’s not as cheap as the typical tracker fund – the expected total annual cost of the fund is 1.47%. Minimum investment in the fund £500 as a lump sum or £50 per month.
Make a windy profit
The second environmental launch this week comes from renewable energy firm Wind Prospect Group, which is looking to raise £10 million through a corporate bond to invest in green energy projects in the UK and around the world. Much of the money that is raised will be invested into building two wind turbines in the West Midlands.
In return for your investment, the Wind Prospect Group will pay an annual, fixed interest rate of 7.5% for investments under £10,000 and 8% for investments over £10,000. Interest is paid out twice a year. The investment period is initially four years, after which time you can redeem your bond and get your money back. Minimum investment is £500.
It’s worth noting that corporate bonds are essentially a loan to the company, under which the sum invested by the Bondholders will be repaid at maturity. But if the company goes out of business, there are no guarantees that you will get your money back. Additionally, direct investment in corporate bonds are not protected by the UK’s Financial Services Compensation Scheme.
Learn more about ‘ethical’ investments
You can find out more about the basics of investing by reading our Beginner’s guide to investment.
You can also read our guide to Ethical investments to find out more about how you can invest with the environment and other socially responsible issues in mind.
Find out more about your FSCS coverage in our Are my savings safe? guide.
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