8th April, 2009

BOSTON & LONDON

For the first time ever, investors and fund managers are now able to compare the carbon footprints of leading U.S. mutual funds, thanks to a report released today by Trucost, the world's foremost environmental data & research company. The report shows that the carbon intensity of mutual funds varies widely, with the highest-carbon fund found to be 38 times more carbon intensive than the fund with the smallest carbon footprint.

The groundbreaking "Carbon Counts USA" report examines the carbon performance of major U.S. mutual funds with a combined value of $1,551,067 million. The research covers 75 of the nation's largest equity funds and 16 major sustainability/socially responsible investment (SRI) funds, using fund holdings and style analysis data provided by Lipper, a Thomson Reuters company.

Analysis of the greenhouse gas emissions associated with eight investment styles shows that overall, sustainability/SRI funds have a smaller carbon footprint than core, growth, value, index, country/regional, equity income and sector funds. However, some of the largest SRI funds are among the most carbon-intensive analyzed, reflecting the diverse environmental, social and governance criteria used by managers.

Simon Thomas, Trucost Chief Executive, said: "The research findings provide valuable information to fund managers and institutional investors looking to identify exposure to future liabilities from carbon emitted by companies in their funds. Using Trucost data, asset managers can reduce the carbon footprints of funds that employ any investment style to control carbon risks, without sacrificing financial returns."

Dr. James Salo, report author and vice president, strategy and research, Trucost, said: "Carbon emissions are a financial issue that will soon have a real price in the US, and companies and shareholders will likely bear a percentage of this cost in the future. Fund managers and asset owners can use carbon analysis to protect their assets from these costs."

Funds with large carbon footprints have holdings which could face greater financial risk from carbon being priced under cap-and-trade schemes. Companies with heavy carbon footprints for their sectors could be hardest hit by carbon costs under carbon trading, promised in the latest U.S. federal budget. The carbon intensity of companies will influence which are most exposed, with knock-on effects on investment returns. Carbon-efficient investment funds are set to be well positioned under carbon constraints.

Other findings in Carbon Counts USA: The Carbon Footprints of Mutual Funds in the US include:

• The combined global emissions associated with fund holdings analyzed amount to over 615 million metric tons of greenhouse gases.
• The carbon footprints of aggregated fund holdings is measured as 335 metric tons of greenhouse gas emissions for every million dollars of revenue allocated to holdings.
• Fund managers can reduce fund exposure to carbon liabilities while maintaining financial returns. Standard & Poor's, NYSE Euronext and UBS are among financial institutions that are using carbon footprint data to manage carbon risks in indices and funds.

The most carbon-efficient mutual funds have the following characteristics:

• Each of the five most carbon-efficient funds has a different manager.
• Four of the funds do not invest in the Basic Resources sector.
• The top three do not invest in the carbon-intensive Utilities and Oil & Gas sectors, and have 80%+ invested in low-carbon sectors such as Financial Services, Banks, and Healthcare.
• Three of the funds are underweight in Food & Beverage companies relative to the S&P 500; the other two do not invest in the sector.
• The top two funds have a Sector investment style; two of the top five are Growth funds, and one is a Sustainability/SRI fund.

The least carbon-efficient funds share the following characteristics:

• Each of the five least carbon-efficient funds has a different manager.
• Four are underweight the Utilities sector against the S&P 500, but three pick Utilities stocks that are more carbon intensive than sector peers in the Index.
• For four of the five funds, stock selection rather than sector allocation is the main cause of their high carbon intensity against the benchmark S&P 500.
• Two are Growth funds, two are specific to either a sector or country, and the fifth is a Sustainability/SRI fund.

Trucost method to calculate fund carbon footprints

Trucost has the world's largest database of corporate greenhouse gas emissions. Carbon footprints of both active and index funds were measured where Trucost holds greenhouse gas emissions data on more than 90% of the value of holdings, using free-float adjusted holdings data as of 31 December 2008. Emissions are converted to their carbon dioxide-equivalents (CO₂-e). Total CO₂-e emissions are attributed to each fund in proportion to ownership of each company. To compare funds of different sizes, carbon footprints are calculated as quantities of CO₂-e emissions per million U.S. dollars of revenue.

About Trucost

Trucost is an environmental data provider which has helped investors and companies understand the environmental impacts of business activities since 2000. Trucost provides data and analysis on company emissions and natural resource use in financial as well as quantity terms to help identify how environmental issues could affect companies' future earnings. Trucost maintains data on the environmental impacts and disclosures of over 4,500 companies. Institutional investors and fund managers use the information to assess the carbon or environmental footprints of their funds, identify differences in performance, address environmental risks and create investment strategies with lower carbon or environmental impacts. Coverage includes most major international indices.

CONTACT: Patrick Mitchell, +1 (703) 276-3266 or pmitchell@hastingsgroup.com.