This UK-domiciled OEIC is the first of its kind to be launched in this country, investing across three areas – eco-energy, pollution control and clean water – with a portfolio comprising between 50 and 70 equities.

It represents the expansion of Allianz’s existing EcoTrends portfolios, which have built up a strong performance record. The group’s Luxembourg SICAV returned 25.9 per cent over one year to 30 January 2007, against a sector median return of 5.5 per cent, and this UK version will be a mirror of the existing funds.

Allianz expects attractive rates of growth for wind power and solar energy over the next few years and believes emerging fuel cell technologies, which allow people to generate their own domestic energy, are interesting stocks to hold.

The fund is underpinned by RCM’s in-house global EcoTrend research team, established seven years ago. This team currently manages more than g1.7 billion globally and focuses on identifying environmental and social trends and themes that are then translated into investment and stock ideas.

The team is also supported by RCM’s proprietary market research network, called Grassroots Research, which is dedicated to uncovering and measuring demand for specific products and services.

Minimum investment: £500 or £1,000 for ISA
Initial charge: 4% outside an ISA, 3% within
Annual management fee: 1.75%
Contact: For more information, visit www.allianzgi.co.uk

Philip Johnson says:
The fund seeks to capture the opportunities in the three key environmental technology areas of alternative energy, pollution control and clean water. It intends to invest a minimum of 75 per cent of its assets in the shares of international companies that have at least some operations in the areas of eco-energy (alternative energy sources and energy efficiency), pollution control (environmental quality, waste management and recycling) and clean water (water treatment and supply). Investment in emerging markets is limited to 20 per cent of the fund’s assets. Its investment objective is to attain long-term capital growth.

Pick up a newspaper or turn on the television or radio news and you will see that the environment is featured on a daily basis. Climate change is heating up political and social agendas. As the world cleans up, it should mean big business for selected firms in the environmental technology sector.

This sector should, therefore, see strong growth potential over the medium to longer term. But what is behind this strong growth potential? The answer is pretty much everybody – from governments and industry to individual consumers, there is growing pressure on a global scale in the form of international and domestic legislation aimed at combating climate change.

Importantly, this legislation shows no signs of abating; directives are actually becoming tighter. Businesses are also taking action as some of the world’s largest corporations commit to spending hundreds of millions of pounds to develop eco-friendly policies and greener best practice. Individuals are taking action too. Worldwide, lifestyles are changing as people embrace the importance of protecting the environment.

This fund provides a good opportunity for investors to get into the environmental technology sector and make potentially strong gains over time. This fund should provide the right results for the right reasons.

4.5 StarsPhilip Johnson is a director at Kenwood Associates