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The Basics of Investing in Cleantech

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Since the 1990s, the financial community has shown a more active interest for investment into the cleantech space -- a trend that is growing across the world. Cleantech is now becoming more widely understood to include any technology that promotes the more efficient use and re-use of the earth's resources in industrial production and consumption. Driven by stronger bottom line returns, investor activity has expanded globally to move beyond triple bottom line (also referred to as triple net) toward traditional earnings-driven investing.

Cleantech (short for "clean technologies") is generally defined as products or services whose focus includes water purification, eco-efficient production techniques, renewable energy, green technology, and sustainable business.

The Cleantech Index

The Cleantech Index™ ("The Index") is the first, and only, stock market index intended to reflect the surging global demand for clean technology (cleantech) products and services. By tracking the market performance of '''companies, CTIUS is the industry standard index that underlies a growing range of financial products (such as exchange traded funds). As such, investors now have an easy, cost-effective, and liquid means to invest in the broad cleantech investment category.

Currently, CTIUS is comprised of 47 companies that are leaders in cleantech innovation and commercial deployment across a broad range of industry sectors: from alternative energy and energy efficiency to advanced materials, from air & water purification, eco-friendly agriculture/nutrition to power transmission, etc. Similar to the Dow Jones 30 Industrials Index, CTIUS contains only the leading cleantech companies that we believe have staying power and the ability to exploit rapidly growing and evolving markets. CTIUS is a growth stock index of leading (clean) technology companies - not a 'laundry list' of every company in the sector or filled with companies recently re-branded as 'green'. As such we place heavy emphasis on Index component quality and purity:

To be even considered, companies must derive 50% of either their sales or operating profits from cleantech businesses.
All eligible companies must pass a rigorous screening process for business strategy, technology/intellectual property, management, revenue and profit quality, growth, market liquidity, business impact, and financial strength. However, a handful of very promising, but more speculative stocks, may comprise a small percentage of the portfolio – typically 2-5% of The Index.
Stocks must have a floated market capitalization of at least $150 million.
Currently, the 47 CTIUS component companies have a combined market capitalization of approximately $290 billion. Calculations from back-testing of the Cleantech Index™ suggest that it significantly outperformed the S&P 500, Dow Jones 30 Industrials, and NASDAQ indices over the past 3 and 5-year periods.