Another boutique stock index is born. In the tradition of broadband, Internet, business-to-business and nanotechnology indexes, we present: the Merrill Lynch Energy Efficiency Index. The ostensible idea is to isolate a sector of the economy and employ public stock prices as a proxy for what's going on in the sector. The real idea is to get publicity and maybe royalty money if somebody decides to start a mutual fund or exchange-traded fund based on the index. Merrill Lynch's new index may deliver useful information on what's going on with smart-meter companies, insulation makers and so forth. But mainly, it's an indicator of the investment fad of the moment. (Which is to say, be careful out there.) From the press release:

"The index is currently comprised of 40 companies globally that Merrill Lynch believes should benefit from the growing momentum to reduce CO2 emissions and the cost of energy.

"“While there has been a clear shift of resources and investor attention into renewable energy, energy efficiency remains an area that is relatively under-explored,” said Asari Efiong, Merrill Lynch SRI/ Renewable Energy equity analyst. “We believe that energy efficiency represents a significant market opportunity for investors, as policy changes look set to force a structural shift in demand.”

"Merrill Lynch has identified the automotive industry, capital goods, semi-conductors and building materials as most exposed to this theme. The Merrill Lynch Energy Efficiency Index is divided into four components: integrated plays with a focus on the capital goods sector; fuel efficiency in the automotive industry; building insulation; and energy-efficient solutions, including products, applications and industrial processes."