BlackRock clean fund targets Asian solar stocks

Wed Jan 27, 2010 8:37am EST
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DAVOS, Switzerland (Reuters) - BlackRock's New Energy Fund is "cautiously" investing more in solar companies after a glut in solar panels and falling prices saw producers' margins squeezed over the past two years, its fund manager said.

The BlackRock New Energy Fund was launched in 2001 and had some $3.9 billion assets under management as of Dec 31.

The fund delivered returns of 21 percent in 2009. That compared with 27 percent returns to the wider MSCI index of global stocks

"We're now cautiously increasing our weightings in solar, it is cautious because we think it's a u-shaped recovery in demand," co-head of the fund Robin Batchelor told Reuters on Wednesday.

"Were focusing a bit more on the Asian producers which we think have a structural advantage over some of the European producers," he said in a telephone conversation from London.

"(Manufacturing in China) gets a big subsidy on power, cheap land, you've got cheap employment, it takes a bit quicker to get your permitting, all your environmental issues taken care of, these are things which all cost a lot in the western world."

"Power is a big component in manufacturing cost, that's putting a structural benefit toward some of the Asian producers."

The BlackRock New Energy Fund cut its exposure to solar from up to 30 percent "several years ago" to 5 percent, in advance of the solar panel over-supply developing, Batchelor said.

ABN AMRO's Solar Energy was down 3 percent last year, while the DJ-SAM (Dow Jones-Sustainable Asset Management) World Solar Index was down 2.4 percent.   Continued...