Alternative energy grabs interest but not many investment dollars

NEW YORK — Most U.S. investors see putting money into alternative-energy companies as both potentially lucrative and a way to support the environment. But while many might see opportunity, few are taking it.

A recent Calvert Group survey that coincided with the establishment of an alternative-energy fund found that while about 85 percent of investors think there is money to be made from investing in areas such as solar and wind power, only about 20 percent have broached the subject with a financial adviser.

Calvert, which manages a big chunk of its money under precepts often referred to as socially responsible investing (SRI), is hoping investors will start acting on their beliefs and invest in the Calvert Global Alternative Energy Fund.

"It really shows we're at a tipping point for public concern about this," said Paul Hilton, director of social-investment strategy at Calvert, referring to the poll of nearly 1,100 investors.

He noted that $5 billion of Calvert's $15 billion in assets under management are invested using SRI principles, which, for example, supports environmental stewardship and nonexploitive labor practices.

There are potential pitfalls.

"It is a long-term play," Hilton said. "There is no question that within this area that you're going to see some volatility in anything this specific. Investors should be aware of that.

"What's exciting is you can look at other times in history when there has been a major evolution in how things are done," Hilton said.

"We can see that these technologies are competitive in a way that they haven't been before."

Jeff Tjornehoj, an analyst at fund tracker Lipper, sees reason for caution.

"There's certainly some growing investor interest in it. I think they're grabbing a lot of the investors who are interested in alternative energy because energy prices are high right now."

Tjornehoj questions, however, whether interest will remain should prices recede. He also said investors should remain vigilant when considering any investment that appeals to them beyond the financial implications.

"If when you see this fund you have a strong emotional response, that should warn you off this as an investment idea until you have a better sense of why you would want an alternative-energy portfolio."

Tjornehoj said that if prices for energy and commodities in general remain at higher levels, it could signal an important change for investment opportunities.

"You might look back on this Calvert fund as the beginning of something very lucrative," he said.