Under the theory that lucrative investment opportunities like alternative energy will be more likely to spring from overseas markets, Fidelity Investments is positioning its 20-year-old environmental energy mutual fund right at the crossroads of those two sectors.

Fidelity announced on Thursday that it has launched the Fidelity Select Environment and Alternative Energy Portfolio, a retooling of the Select Environmental Portfolio mutual fund.

The idea is to increase exposure to faster-growing industries like alternative energy and efficiency, while reducing holdings in slower-growth businesses.

Anna Davydova, who manages the portfolio for Fidelity, points to three industry forces, independent of market movements, that she said will drive the sector's long-term growth: massive populations in emerging markets will become more industrialized; future government policies will emphasize environmental protection and reduction in fossil fuel emissions; and technology is developing quickly enough to drive energy solutions, increase energy efficiency and control pollution.

The fund will invest at least 80% of its proceeds in firms in renewable energy, energy efficiency, pollution control, water infrastructure, waste, recycling technologies and other services that support those businesses.

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