September 27, 2007
Ardour Global Index Offers Unique Alternative Energy Universe
by Anne Moore Odell
Ardour Global Index adds new companies in quarterly rebalancing, including US manufacturer Beacon
The growth in the Ardour Global Index (Ticker: AGIGL) reflects the growing consumer and
investor interest in alternative energy. The Ardour Global Index was recently updated to include
eleven new companies and deleting six companies, bringing its total number of index constituents to
98. These new companies contribute a net of $12.5 billion in market cap. The Index is updated
quarterly for more flexibility to include new initial public offerings (IPOs).
AGI Extra Liquid (Ticker: AGIXL) is a 30-company universe created from the Ardour Global Index. The
AGI Extra Liquid Index saw four new companies added (and four old companies removed) with the most
Alternative energy is a rapidly growing industrial sector, which data
from the indexes backs up. Comparing the second quarter of 2006 to the second quarter of 2007, the
Extra Liquid Index has seen a weighted revenue growth rate of 85.9%.
These growth rates
are buttressed by global policy initiatives aimed at curbing climate change. The European Union,
for example, has mandated that European Union power producers reduce carbon emissions by 20% over
the next 20 years through the use of alternative energy and conservation. The US Congress currently
is considering a similar 15% mandate. China, India and various other jurisdictions are pursuing
similar voluntary initiatives.
The dwindling oil supply is also helping drive the
interest in alternative energy. Investors are looking at alternative energies because of concerns
around energy security, with many oil and gas reserves in areas of the global with political
"Based on current levels of alternative energy usage, this implies 20-year
industry growth of between 3000% (30X) and 7500% (75X), depending upon the amount achieved through
conservation. Either way, strong growth rates are government mandated," explained Joseph A.
LaCorte, CFA, Managing Member for Ardour Global Indexes.
The Global Index is
capitalization-weighted and float-adjusted. The Indexes are rule based and run with minimal
intervention. Dow Jones Indexes serves as the calculation agent for the Ardour indexes.
The Ardour family of global indexes was launched in May 2006. The Global Index's one-year
return is +63.46%, with a year-to-date performance of +48.85%, both as of September 25, 2007. The
Extra Liquid Index's one-year performance is +49.13%, while its year-to-date is +40.57% of the same
AGI maintains a universe of "pure-play" global alternative energy companies.
Prior to each rebalancing, the universe is updated by reviewing publicly available data sources
such as IPO calendars, company reports, and similar databases. In addition, nominations to the
universe are made by Ardour Capital Investments, one of the partners in the Index. Finally,
nominations to the universe by any third party will be considered. All nominations are then
subject to confirmation of company fundamentals by AGI and the approval of the Index Committee.
"All companies in the universe are principally engaged in the business, that is, they
generate more than 50% of their revenues from alternative energy," LaCorte said. "As a practical
matter, most of the index constituents relate to renewable energy through solar, wind or bio-fuels,
including ethanol. Nuclear in all forms is excluded."
The eleven companies added to the
Index this quarter are Beacon Power (Ticker: BCON US), BioFuel Energy Corp (Ticker : BIOF US),
Capstone Turbine Corp (Ticker: CPST US), China Sunergy Co. Ltd. (Ticker: CSUN US), EnerNOC Inc.
(Ticker: ENOC US), GeoDynamics Ltd. (Ticker: GDY AU), Hydrogenics (Ticker: HYG CN), LDK Solar Co.
(Ticker: LDK US), Solaria Energia Y Medio Ambi (Ticker: SLR SM), Steico AG (Ticker: ST5 GR), and
Yingli Green Energy Holding Ltd. (Ticker: YGE US).
The AGI Extra Liquid added three global
IPOs to its list: LDK Solar, a Chinese producer of multicrystalline solar wafers; Solaria Energia Y
Medio Ambi, a Spanish manufacturer of solar collectors; and Yingli Green Energy Holdings, a Chinese
maker of PV modules.
Power with headquarters in Wilmington, MA was one of the seven US companies added to the Global
Index. A maker of flywheels systems, Beacon Power has recently begun production its newest
flywheel system, the core component of planned 20-megawatt frequency regulation plants. By the end
of 2008, Beacon Power's goal is to have 10 to 20 megawatts of energy storage connected to the grid
and providing revenue-generating regulation services.
"Ardour Capital Investments has been
familiar with Beacon Power long enough to recognize that our energy storage technology is
efficient, sustainable, and well-suited to provide frequency regulation service to the power grid,"
said Gene Hunt, Director of Corporate Communications for Beacon Power. "The decision to add Beacon
to the Ardour Global Index of global alternative energy companies we believe is further validation
of the potential of our business model and technology."