Unlike in neighbouring Netherlands, there are no tax breaks in Belgium for such investments. "Citizens who buy into these kind of funds are driven by ecological motivation. But our decision to create the specialised funds wasn't just based on the changing mentality of the public," says Dierckx. "More importantly, we found out that there were enough interesting shares on the stock markets to create a fund with good profitability perspectives."
Of the alternative energy fund's EUR 30 million investments, about 30% is invested in companies that are constructing wind turbines or supplying components for wind turbines. The largest share, 9%, resides in Vestas, with 4% in Gamesa of Spain, 7% in Nordex and 5% in NEG Micon. "We're very positive about Gamesa, a nice player on the Spanish market. For NEG Micon the problems seem to be resolved and the share price seems quite cheap. We also have a good eye on Nordex, which came on the market this year. We bought Nordex as soon as it became available. We're interested in buying stock assets of blade producers, but so far we haven't found any on the market," says Dierckx.
Another 30% of the fund is invested in wind and hydro power station operators. Fuel cells are good for about 7% and solar energy for 15%. Smaller amounts of capital are reserved for builders of microturbines such as Turbo Genset and Capstone Turbine.
"We do believe that wind energy is competitive with traditional producers of electricity. For the moment, solar energy is not competitive -- it still needs support from government subsidies; maybe in a few years, when the technology has further developed."
Liquidity
To qualify for inclusion in the portfolio, there has to be good liquidity in the shares being considered: it must be possible to buy or to sell a package of shares without disturbing the market. KBC Alternative Energy Fund chooses its assets among the growing number of companies active in the field of renewable energy. The quality and valuation of the stock and the technical expertise of the company's management are crucial elements in the stock picking process.
The fund's older sister, the KBC Eco Fund (General), is escorted by an ethical committee of professionals who supervise the proposed acquisitions. All shares come under close scrutiny before being allowed into the portfolio. "We don't buy assets of a petroleum company because it builds a few wind turbines," says Dierckx. "This fund also has Vestas in its portfolio; it's not limited to companies who work in the eco-sector, but it can also put companies who work with ecological principles in its package," says Dierckx.
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