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January 26, 2000
New Alternatives Fund Invests in a Greener Future
The first environmental mutual fund remains optimistic about the future economic opportunities of
alternative energy.
SocialFunds.com --
With peace in the oil-producing Middle East and luxury sport-utility vehicles rolling off the
assembly line like hot dogs, it is easy for some to forget that fossil fuels are a finite resource.
New Alternatives Fund is for everyone else, investors that foresee a future where the need for
clean water, clean water, and alternative sources of energy will be infinite.
 New Alternatives Fund is a socially responsible mutual
fund that invests specifically in industries oriented toward a clean environment, including
companies involved in developing alternative energy. Conceived in the 1970s and founded in 1982 by
father-and-son team Maurice and David Schoenwald, the fund was a direct and proactive response to
concerns about the energy crisis and environmental degradation.
"It was around this time
that people were chaining themselves to nuclear power projects under construction, and tension in
the Middle East was viewed as a threat to Israel and the well being of other nations," said David
Schoenwald, co-manager of the fund and former attorney for Law Services, a law agency for
low-income clients. "The notion of clean energy sources which people didn't have to kill each other
for sounded attractive."
Although the energy crisis has been in remission and solar energy
has had its setbacks, such as when the Reagan administration took solar devices off the White House
erected by Jimmy Carter and eliminated or reduced tax credits, New Alternatives has stuck to its
purpose. Now there are several viable solar companies, as well as growth in other forms of
alternative energy, and the fund has been able to invest a larger portion of its assets in clean
energy than ever before.
In addition to solar power companies, New Alternatives invests in
hydroelectric and geothermal energy, older but efficient forms of clean energy with new technology
being constantly developed, as well as wind turbines, biomass energy, fuel cells, and natural gas.
Their top holdings include FuelCell Energy, Astropower, and Calpine, a geothermal and natural gas
turbine manufacturer.
Entirely consistent with its environmental mission, New Alternatives
adds breadth to their portfolio with companies concerned with recycling, energy conservation,
pollution monitoring, forest conservation, cogeneration, and healthful foods, such as Whole Foods
Markets, Wild Oats, and Horizon Organic. They invest in Ionics, the water purification and
desalinization firm, and SLI, the makers of efficient, compact fluorescent light bulbs.
The Shoenwald's stock selection process supports their clear environmental objectives. With a
thorough knowledge of emerging environmental technologies, New Alternatives uses a value-oriented
investment style to identify stocks that have the potential of improving the environment.
"We do not have a formula," said Schoenwald. "Many socially concerned funds are measured by
screens. Our principal screen is that a company in which we invest must have a positive impact on
the environment. Merely avoiding pollution is not sufficient."
Avoidance screens may not
be stated, but come naturally to the Schoenwalds, a family of "old time liberals." Luckily,
companies that are environmentally proactive are rarely involved with military contracts, gambling,
tobacco, or alcohol, and are generally responsible with employees and communities. There are
occasional conflicts, such as United Technologies, which makes military items as well as fuel
cells, or Enron, which makes windmills but is not a model employer, where New Alternatives opts to
not invest.
After nearly 20 years, the positive environmental approach and optimism of New
Alternatives Fund may be paying off in the long run, earning it an "A" for endurance through a
period when environmental industries have been on slippery ground. While the total return for last
year was only 8.5 percent, the average annual return since inception is 9.58 percent, gaining 20
percent ranking from Wiesenberger, a leading provider of fund information to financial
professionals.
But perhaps more significantly, New Alternatives has rocketed up 20 percent
over the last few weeks, buoyed by investments in high tech environmental and alternative energy
industries. In a new millennium fraught with possibilities, these forward-thinking investments may
finally be pushing our society into a greener future, and New Alternatives Fund with it.
©
SRI World Group, Inc. All Rights Reserved.
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