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- FTSE adds new ET100 index to Environmental Technologies series
- Jupiter Ecology Fund adopts new FTSE index
- Emerging trend to use benchmarks which closely match investment strategies
FTSE Group (“FTSE”), the global index provider, has launched the FTSE ET100 index, adding to its innovative FTSE Environmental Markets Series. Jupiter (one of the UK’s leading fund groups) is adopting the new index as the benchmark for its pioneering Jupiter Ecology Fund immediately.
The Environmental Technologies Index Series is designed to measure the performance of companies whose core business is in the development and operation of environmental technologies. To qualify, companies must derive at least 50% of their business from environmental markets. These include Renewable & Alternative Energy, Energy Efficiency, Water Infrastructure & Technology, Waste Management & Technologies, Pollution Control and Environmental Support Services, as defined by the FTSE Environmental Markets Classification System (EMCS). There are now 21 indices in the associated FTSE Environmental Markets Series including the Environmental Technology indices.
Tracker funds, structured products, and ETFs all use these indices, which are also used as performance benchmarks. Jupiter’s use of the index as a performance benchmark is part of a trend for asset managers to use performance benchmarks more closely aligned to their investment strategies as a better way to measure manager performance.
The FTSE ET50 index, the sister index of the FTSE ET100, was first launched in 1999 by Impax Asset Management making the ET50 the longest running environmental technology index in the world. FTSE has a partnership with Impax that began in 2007 and together they have developed an enhanced methodology and new governance structure.
David Harris, Director, FTSE, said: “We are delighted that the Jupiter Ecology Fund is the first to adopt the new FTSE ET100 index. It’s extremely fitting as both companies are pioneers in their respective industries for supporting environmental market investing. We have seen huge changes in the shape of the market: in the recent past it was dominated by a small number of large renewable energy companies. Today it is more diversified with the Energy Efficiency (31.1%) and Water Infrastructure and Technology (21.7%) Sectors representing the largest sector weights of the index.”
Charlie Thomas, Fund Manager, Jupiter Ecology Fund, said: “The launch of the FTSE ET100 Index is a welcome development and a clear sign that environmental investing has come of age. Given the breadth of our holdings now, compared to 25 years ago when the Fund originally launched, it has become increasingly important to us to have this reflected in a more accurate and relevant index alongside our existing benchmark, the FTSE World Index. For this reason we were very keen to adopt the newly launched FTSE ET100 which so successfully captures the many different types of companies that are now involved in environmental technology.”
