Sarasin Adds U.S. Cleantech Stocks To Power Fund

February 27, 2009
Encouraged by President Obama’s $787 billion stimulus package – 13.5% of which is earmarked for climate change initiatives – Bank Sarasin is adding U.S. stocks to its New Power Fund.

“So far we haven't had such a big focus on the U.S., because in terms of renewables, it wasn't the place to be – we were more focused on Europe," Matthias Fawer, vice president of sustainable investment at Bank Sarasin, told Reuters.

"But now with the stimulus package and the slowdown in Europe, especially in the Spanish solar market, we are moving to U.S. stocks," he said.

The leading Swiss private bank expects installed wind and solar capacity to grow in 2009 in both the United States and Europe.

U.S. solar stocks chosen by Sarasin include First Solar, a thin film maker and 2.97% holding for the fund, and Energy Conversion Devices. Both could benefit from the stimulus package, as could SolarWorld, a German company with production facilities in the U.S. – at 4.89%, it was the largest holding in the fund as of the end of January.

The U.S. stimulus package commits $106 billion to climate change initiatives, according to Deutsche Asset Management figures released this week. Of this, $85 billion will go to direct spending and $21 billion to renewable energy tax breaks.

The direct spending will include investment to improve the efficiency of the electricity grid, and in new power lines to connect renewables to big cities.

In light of this, Bank Sarasin has added stocks like General Cable and ITC Holdings to its portfolio. ITC is to build a $12 billion transmission line to carry wind-generated electricity.

The fund has also invested in Itron, a manufacturer of “smart” meters, which could benefit from energy conservation grants.

Florida Power & Light Group (3.08% of the fund at end-January) is believed to be in a good position to take advantage of project financing.

Lipper data showed the Sarasin New Power Fund down 55.17% in the 12 months to the end of January. The fund family has an estimated $274.8 million in assets under management.