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Tracking alternative energy companies for investors
1 March 2006
A new way to track companies directly involved with the development of alternative energy, along with related products and services, debuted in the US in January. The Alternative Energy Industry Equity Index, an electronic service developed by the International Securities Exchange (ISE) and Cronus Capital Markets (CCM), provides information for investors interested in wind, solar, geothermal, hydrogen, hydropower and nuclear fusion. "If you're interested in alternative energy, you can look at our index and get an idea of why we choose the stocks we choose," says Bruce Goldberg of ISE. "You can use it for education and research or as a way to participate in the market." The index is a sampled, equal-weighted ranking, adjusted to reflect diversity in market capitalisation size among up to 25 different stocks, which prevents a few large component stocks from dominating the listings. New companies are added only when there is a vacancy. "There's been a great deal of press about the cost of energy, it has the potential for growth and it has been on everybody's mind," Goldberg says. "Of course, we don't make money if stocks go up or down, we make profits by the amount of trading volume." The index trades under the ticker symbol POW on the ISE and allows investors to track and participate in the growth of alternative energy as a viable sector within capital markets. CCM is a research and consulting firm for the alternative energy sector and ISE is the world's largest equity options exchange.
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