Nationwide Survey Finds: Americans See Environment as Alternative Fuel Source for Economic Growth

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NEW YORK--(BUSINESS WIRE)--

Americans are hopeful that the environment will help rescue the struggling economy, according to the results of the third-annual survey on environmental investing released here today by Allianz Global Investors, a leader in the global investment universe.

Of the investors surveyed, 73% think that enacting policies to promote “green” practices and technologies will have a positive impact on economic growth. Further, 57% believe that the recent push to create “green” jobs will really help turn around the economy.

“It’s clear to me that government investment in the environment will be an important engine for economic renewal in the United States,” said Bozena Jankowska, head of the RCM Sustainability Research Team and lead portfolio manager of the Allianz RCM Global EcoTrendsSM Fund. “During his State of the Union address last week, President Obama said ‘The nation that leads the clean energy economy will be the nation that leads the global economy, and America must be that nation.’ This sentiment signals unwavering support which could represent a very significant opportunity for investors.”

In fact, the U.S. Government is already showing they are serious about the impact of climate change on the sustainability of companies. The Securities & Exchange Commission voted last week to encourage companies to disclose climate change risk on their businesses.

Conducted for the third year in a row, the poll of 1,000 adults examined investors’ understanding and attitudes toward the environment as an investment opportunity. The poll was conducted via the Internet between December 28, 2009 and January 12, 2010 by GfK Roper Public Affairs & Media, a division of GfK Custom Research North America. Participants had to have primary or shared responsibility for investment decisions in households with financial assets of at least $100,000. The sample was weighted to match the characteristics of the total online population in terms of gender, age, household asset level and region, according to the U.S. Census. The same methodology was used for the surveys conducted December 12-19, 2008, which yielded 1,264 completed interviews and December 14-20, 2007 which yielded 1,003 completed interviews.

More Investors Find it Easy to be Green

Rising investor demand for the environment persists despite the economic crisis of the last 16 months.

According to the survey, investors continue to view the environmental technology sector as a “buy” with 63% classifying the environment as the most desirable investment opportunity of the 11 categories surveyed.1 Further, there has been a 70% increase from 2007 to 2009 in the number of investors who say they have already made investments in companies that are capitalizing on environmental trends (17% in 2007 versus 29% in 2009).

“Following the biggest economic crisis since the Great Depression, it is striking that investors, as identified by our survey, are still looking to their financial advisors to bring them interesting investment opportunities, and environmental technology is clearly at the top of the list,” said Brian Gaffney, Chief Executive Officer of Allianz Global Investors Distributors. “Investors realize the potential impact that green investment can have on the economy and they want to capitalize on the opportunity.”

Investors appear engaged to act, with 54% reporting that they are at least somewhat likely to invest in environmental technology over the next year.

The Government’s Green Report Card

When surveyed last year, investors saw the shifting political landscape as a positive development for green investing.

In the Allianz Global Investors 2008 environmental investing survey, 78% of investors said we were likely to see more policies to promote business investment in new environmental technologies in the first year of the Obama Administration than we did under eight years of the Bush Administration. Yet this year’s survey reveals a different tone. Less than half of investors (49%) say that President Obama has done as much as he should to promote environmental investment since he took office.

Congress receives even lower marks. Last year, 74% of investors said that the new Congress will be more supportive of policies to promote business investment in new environmental technologies than the old Congress. However, in this year’s survey only 34% of investors say that the current Congress has done as much as it should to promote environmental investment.

The Portfolio is Always “Greener” on the Other Side

Despite the increase in investor optimism about environmental technology, several misperceptions remain which may be preventing investors from jumping in.

For one, the majority of investors (55%) continue to believe they must sacrifice returns when they make environmental investments. In addition, investors continue to view environmental investing as first and foremost socially responsible (59%) versus a good financial decision (41%).

“These results imply what we believe is a misunderstanding about the investment opportunity presented by the environmental technology sector,” said Jankowska. “Although there is tremendous social value to financially supporting the environment, there can be significant economic value as well. In fact, compared to the S&P 500 index – the proxy for the US stock market – the FTSE ET50 has outperformed since its inception in January 2001.”2 It’s important to remember, however, that past performance is no guarantee of future results.

The survey also shows that investors view environmental investments as more volatile to their portfolios. Seventy-one percent say that investing in environmental opportunities makes their portfolio more volatile.

“Volatility should not be viewed in isolation and investors should consider the complete makeup of their portfolios to adequately assess volatility risk,” said Jankowska. “Although the standard deviation of the FTSE ET50 is a bit higher than the S&P 500, an allocation to environmental technology may not necessarily increase the overall volatility of a portfolio as it has been shown to have a low correlation with other asset classes like fixed income and commodities.”3

Seeking Help to Go Green

The survey found that investors are eager to learn more about environment-related investing opportunities, and are looking to their financial advisors for help.

More than two-thirds (69%) of all survey respondents agree they would need to consult a financial advisor for help investing in the environment. Among those with a financial advisor, a large majority (76%) think that their advisor is at least somewhat knowledgeable about environmental investing and half (50%) think it is important that their advisor bring them more environment-related investment opportunities. However, 72% of those investors say that their financial advisor has yet to recommend an environmental investment opportunity.

“Environmental investing represents a unique opportunity for financial advisors to provide significant value and insight to their clients,” said Gaffney. “The environmental technology sector is complex, and innovation is occurring rapidly and on a global scale. Investors need guidance on how they can intelligently and profitably participate.”

About Allianz Global Investors: With more than $1.5 trillion under management for its clients worldwide (as of 12/31/2009), Allianz Global Investors ranks among the top five asset management companies in the world. Our investment solutions – including mutual funds, closed-end funds and managed accounts – provide individual investors with unique access to a premier group of institutional investment firms, including PIMCO, NFJ Investment Group, RCM, Nicholas-Applegate and Oppenheimer Capital. Allianz Global Investors has carefully assembled these firms to represent a broad spectrum of asset classes and investment styles.

Allianz SE, the parent company of Allianz Global Investors, has been a pioneer in corporate sustainable development and has generated a comprehensive response to help combat climate change. Central to their progress is a strategic global partnership with the World Wildlife Fund (WWF) on climate change strategy and research. Through this extensive partnership, Allianz and WWF are developing expertise on the wide-ranging impacts of climate change on the financial sector which not only directs Allianz’s policies and product development, but is also shared with other financial companies, customers and regulators.

Allianz belongs to several international climate changes bodies, enabling the firm to stay at the forefront of new trends while contributing to industry-wide advocacy and research projects. Allianz co-chairs the Climate Change Working Group of the United Nations Environment Program's Financial Initiative (UNEP FI), and through the group is promoting proposals to mobilize the financial sector to act on climate change issues. In addition, Allianz maintains climate-related advocacy partnerships with the Carbon Disclosure Project and The Poznan Communiqué on Climate Change.

Financial institutions play a key part in growing markets and Allianz has made a commitment to fund the development of renewable energy projects with an investment of one billion euros by 2012. In addition, Allianz offers a range of “green” products and services, including emission trading credits, for its customers in the insurance and banking sectors. Finally, the firm has set a target to cut their own carbon emission to 20% below 2006 levels by 2012.

Investors should consider the investment objectives, risks, charges and expenses of the Allianz RCM Global Eco Trends Fund carefully before investing. This and other information is contained in the Fund´s prospectus, which may be obtained by contacting your financial advisor, or by calling 888-877-4626. Please read this prospectus carefully before you invest or send money.

An investment which focuses its holdings on environmental-related industries will be more affected by positive or negative events affecting these sectors than a more diversified investment. Companies in these sectors may be particularly susceptible to factors such as environmental protection, political developments, changes in government subsidy levels conservation practices and tax policies, for example. These sectors are newly developing and strongly influenced by rapid technological change, which can render an existing product obsolete. Water-related investments can be affected by risks related to the volatile and speculative nature of commodities, uncertainties regarding exploration, environmental damage, depletion of resources, and risks related to rapid technological change.

The Allianz Funds are distributed by Allianz Global Investors Distributors, LLC, 1345 Avenue of the Americas, New York, NY 10105-4800. www.allianzinvestors.com.

Investment Products: Not FDIC Insured I May Lose Value I Not Bank Guaranteed

1 These are survey results and are not a recommendation to buy securities of environmental companies. Investors contemplating changes to their portfolios should contact their financial advisor.

2 The FTSE ET50 Index comprises the 50 largest pure play environmental technology companies, by full market capitalization, globally.

    Return       Risk       Start Date       End Date
S&P 500 1.3% 16.1% Jan 2001 Dec 2009
FTSE ET50 2.8% 28.4% Jan 2001 Dec 2009

Since inception (Jan 1974) the S&P 500 has returned 11.2% on an annualized basis.
Source: Standard & Poor’s, FTSE

3 See above footnote (2) for standard deviation (a measure of volatility/risk. Measuring dispersion about an average which, for an index, depicts how widely the returns varied over a certain period of time. The greater the degree of dispersion, the greater the risk.) Correlation comparison below.

      1.       2.       3.       4.
1. FTSE ET50 1.00
2. Barclays Capital U.S. -0.01 1.00
3. DJ UBS Commodities 0.38 0.07 1.00
4. S&P 500 0.82 -0.04 0.33 1.00

Source: Zephyr

Allianz Global Investors
Megan Frank, 212-739-3501
megan.frank@allianzinvestors.com
or
FD
Laura Novak, 212-850-5682
laura.novak@fd.com
or
Marisa Mulqueen, 212-850-5745
marisa.mulqueen@fd.com

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