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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 Power.


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).

The 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 recent rebalancing.

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 strife.

"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 time period

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.

Beacon 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."

 

 
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