Friday, 8 October 2010

Green investor update

With the end of the third quarter it is time to get an update on our green investments courtesy of HSBC.

It looks like another bad quarter, underperforming the broad equity market index by about 0.5%. On the bright side, performance is consistent. Consistently under performing the equity market, as I predicted but certainly not what HSBC or our friendly reporter at the Financial Times, Kate MacKenzie, predicted.

Since 2008 an investor in this HSBC green fund would have lost more than 20% against a standard global equity benchmark. Ouch. That is what I call suffering for your principles.

But then, maybe it isn't all about principles. Maybe some people do buy into the "green is the future" malarkey. There is an apt investment lesson in that case. Don't let your emotions bias your use of and interpretation of data. In this case, the data and facts pointed to subsidy reliant "green" industries and companies being poorly positioned to improve their profitability or grow their businesses. The clear message was sell.

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