The largest global industry is energy production and supply. Investing in renewable energy, based on performance percentages in the recent past, could be a very smart decision for investors to make. Not only is it sensible in terms of planning for good returns, but it is also an excellent opportunity for investors to help our environment by supporting technologies considered green. Recent data from Chicago’s HFR demonstrates that in 2009 the Alternative Energy Index increased by more than 47 percent. This means that it did better throughout the year than all other commodities.
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12 months ago we ran a feature about the top 5 renewable energy mutual funds, who investors with green leanings should look into. These were money manager recommended mutual funds that invest solely in green energy companies.

Since then, practically every mutual fund on the market, green or not, has taken a big hit as the economy spluttered. This spring in particular was a very hard time for many mutual funds, as stock prices fell dramatically. The best five alternative energy mutual funds that we presented in the feature were the Winslow Green Growth Fund, the New Alternatives Fund, PowerShares WilderHill Clean Energy, the Guinness Atkenson Alternative Energy Fund, and the Calvert Global Alternative Energy Fund.
Have any of these funds withstood the battering of the last year? If so, which ones and what are the figures?

1. Winslow Green Growth Fund – Last twelve months: +8.81%

The Winslow Green Growth Fund has always been one of very best long term funds for green investors. The fund concentrates on American small cap growth companies. The main goal of this fund is exclude companies which harm the environment, and to include alternative energy companies. They do have some companies in the portfolio, who, whilst not directly helping the environment, do no harm. The fund evaluates potential companies by looking at, for instance, the environmental impact of the company. It is quite strict in terms of what it includes in its portfolio.
Despite the economic meltdown, this fund is one of the very few that is in the red for the year. It truly is the strongest renewable energy mutual fund out there.

2. New Alternatives Fund – Last twelve months: +1.34%

New Alternatives Fund is considered one of the best long term mutual funds. This fund invests in companies of all sizes, from small cap to large cap, from all around the globe. Companies must positively impact the environment to be included in this fund portfolio. Renewable energy companies make up more than twenty five percent of its portfolio, and it is considered a very environmentally friendly mutual fund. With its high percentage of green energy companies, expect the portfolio to grow well in the future.

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Alternative energy mutual funds can be a great investment opportunity. If you are interested in investing in alternative energy or renewable energy, then alternative energy mutual funds may be the way to go. Mutual funds have many benefits, but also some disadvantages as well. Mutual fund investments in alternative energy can help you hedge your risks, and diversify your portfolio. This will make you a stronger more profitable investor. Alternative energy will be the energy of the future, and even scientists are starting to see the detrimental effects that oil and other fossil fuels can have on the earth when they are used. Alternative renewable energy sources, such as waste to energy processes, solar energy, wind energy, ocean energy, and geothermal energy, all can play a part in leaving the world a better place. When you invest in alternative energy mutual funds, you can play a role in this process while seeing great returns on your investment and minimizing your risks as well. It is just a matter of time before an oil crisis occurs, because this fuel is limited and can not be renewed fast enough. In addition, more countries around the world are developing, and this also increases the need for energy globally.

Many investors want to invest in alternative energy, but do not want to buy stocks in this technology. Alternative energy mutual funds can help. These funds help reduce the costs of the transactions, leaving more of your investment capital to actually be invested. Mutual funds are usually well diversified, and this minimizes the risks involved. Alternative energy mutual funds are also professionally managed, just like other mutual funds, so you get the benefits of a professional money manager along with your investment. Make sure that the alternative energy mutual funds you invest in are diverse across more than one sector though, because a mutual fund that only invests in energy will still fall if the energy sector falls. Instead, choose alternative energy mutual funds that invest across several sectors and industries.

Mutual funds can help make your money work for you. Because these securities are pools of funds from many different investors, the amount is much larger than just your investment. This gives you an advantage over investing small amounts on your own. Alternative energy mutual funds are usually very liquid, which means if you want to sell your investment it is usually not hard to do so. Mutual funds offer many benefits over purchasing stock shares, and the risks are usually lower as well. If you want to invest in alternative energy, alternative energy mutual funds can spread your investment through several companies and areas, making it that much safer and less volatile.

Alternative energy mutual funds can help you hedge your investment and portfolio risks. Alternative energy sources are the wave of the future, and smart investors are getting in now, before the new president takes over. The next presidency will have a focus on green environmentally friendly energy sources, which mean that this sector is poised to take off. Alternative energy mutual funds can help you get decent returns on your investment and offer the benefits of mutual funds, with lower risks than dabbling in the stock market. After all, investing in one company could have severe consequences, such as the complete loss of investment capital. Investing in alternative energy mutual funds will spread these risks across many companies in the desired sector, in this case alternative energy. This makes the risks much lower, while maximizing the return potential on your investment.

The top 5 renewable energy mutual funds offer a way for investors to invest in mutual funds with a green approach. These money manager recommended mutual funds invest in renewable energy companies. The top five of the alternative energy mutual funds would include Winslow Green Growth Fund, New Alternatives Fund, PowerShares WilderHill Clean Energy Portfolio, Guinness Atkinson Alternative Energy Fund, and Calvert Global Alternative Energy Fund.

1. Winslow Green Growth Fund

Winslow Green Growth Fund, symbol WGGFX, is one of the best long term mutual funds to have in your portfolio. This fund invests primarily in American small cap growth companies. The goal of this fund is to include alternative energy investments and companies that are not detrimental to the environment. This mutual fund does not specialize only in alternative energy investments, but rather has a green approach. Companies are included in the portfolio that may not help the environment but also do no harm. The fund looks at the environmental impact of the company and the history of their environmental profile, as well as all the other evaluation factors, before deciding whether to include a company or investment in the portfolio.

2. New Alternatives Fund

New Alternatives Fund, symbol NALFX, is also one of the best long term mutual funds. This aggressive growth fund makes investments in all company sizes, from small cap to large cap, and includes companies from all over the globe. Only companies which make a positive impact environmentally are included in this fund portfolio, and at least twenty five percent of the portfolio consists of renewable energy companies. This recommended mutual fund also includes investments in pollution prevention, clean water and air, and conservation efforts, making it a very environmentally friendly mutual fund to invest in. The high percentage of renewable energy companies included can mean healthy growth in the future.

3. PowerShares WilderHill Clean Energy Portfolio

PowerShares WilderHill Clean Energy Portfolio, symbol PBW, is one of the recommended mutual funds as well. This fund follows the WilderHill Clean Energy Index, and includes a portfolio of thirty six stocks that are in renewable energy companies using clean energy technology. This fund will benefit greatly if president elect Obama actually moves America towards alternative renewable energy sources. All of the investments in the portfolio for this fund are used for clean energy stocks. This mutual fund is one of the most environmentally friendly of all the aggressive growth funds, because only companies using clean energy technology that is renewable are included.

4. Guinness Atkinson Alternative Energy Fund

Guinness Atkinson Alternative Energy Fund, symbol GAAEX, is managed by Tim Guinness, and this fund believes in renewable energy companies. The management of the fund is done using long term capital appreciation strategies. Alternative energy companies which receive more than half of the revenue generated from alternative energy technologies are included inn the portfolio, which holds between forty and sixty investments at any time. This fund is considered riskier than most, because there is a lack of diversification and because foreign securities are included.

5. Calvert Global Alternative Energy Fund

Calvert Global Alternative Energy Fund, symbol CGAEX, is the last of the five recommended mutual funds. This fund has more than one hundred and forty million dollars in assets, but may be more volatile than many other mutual funds because foreign investments outside the United States are included in the fund portfolio. This is one of the aggressive growth funds, so the possible rewards are also greater. This fund invests in renewable energy companies in every market cap level, from small to large. Generally at least eighty percent of the net assets will be invested into renewable energy companies. This means this fund is not very well diversified either, but many investors want to invest in alternative energy technology without diversity, making this fund one of the top five.

Investing in a solar energy ETF can be a good investment for many, but these do have both advantages and disadvantages that potential investors should understand. First of all, what is a solar energy ETF? Almost every one understands that solar energy is an alternative energy source that is clean, sustainable, renewable, and does not use fossil fuels or have harmful carbon emissions. ETFs are short for exchange traded funds, and these investment vehicles are a combination investment. ETFs are a cross between a mutual fund and shares of common stock. These instruments can be traded through the day, and they are a portfolio of different securities. Exchange traded funds are listed on a recognized stock exchange, and ETFs have the ability to trade to the total asset value that the fund holds. These investments are managed by a professional financial advisor or money manager.

Solar energy technology and residential solar power systems have become more widespread and popular. This has caused an increase in the purchase and price of solar energy stocks and solar energy ETFs. Solar energy has great potential, and investing in this alternative renewable energy source can make good financial sense. The new administration and president have made it clear to the world that alternative energy sources including solar power technology are going to be a priority in the next four years. This means an investment in solar energy stocks and solar energy ETFs have more return potential when this energy source becomes more commonly used.

Some pros of solar energy ETF investment include the environmental aspect. Solar energy is clean and does not pollute the atmosphere or contribute to global warming, making it an extremely clean source of alternative energy. Solar energy has not taken off like wind energy has yet because solar energy is more expensive, but there are already tens of thousands of residential solar power systems in use across America, many in the west where longer days and brighter sun make solar power more suitable. Solar energy technology has advanced to the point where this alternative energy source is much more cost efficient, and the sector is starting to take off. Investing in solar energy stocks and solar energy ETFs can provide you with a much better return, while doing your part to eliminate pollution, greenhouse gas emissions, and global warming. ETFs in solar energy help minimize the risks associated with individual solar energy stocks, because the risks are spread much wider. These funds are like mutual funds with greater flexibility. Solar energy EFTs may also have tax advantages which mutual funds do not.

Solar energy ETF investments can have some cons as well. These hybrid investments usually incur brokerage fees or commissions on each trade or purchase, and this can lower the returns you see on the investment. Embedded fees may also be hidden into the contracts or paperwork, and you may not be aware of these fees until they are deducted. You can minimize these risks when investing in solar energy ETFs. Make sure you read any paper or contract very carefully, including any fine print, so that you are aware of any fees and commissions charged. The investment into solar energy exchange traded funds can also involve trading at a premium or discount, which means trading prices may happen either above or below portfolio asset value.

Solar energy ETFs offer an opportunity for some investors, but these are not for everyone. Weigh the pros and cons carefully, to ensure you understand the technology used, the terms and conditions, and all other factors. These fund investments can offer you many advantages for investing in solar energy without the high risks involved in solar energy stocks, but there are some disadvantages you should know as well.

Renewable energy IPO investments have both advantages and disadvantages, and understanding both sides can help you make more informed investment decisions. Renewable energy advantages include clean air, far less pollution, less greenhouse gas emissions which contribute to global warming, a domestically produced energy source, an much better energy security. The renewable energy market is expanding, and new companies are going public in this sector in larger numbers than before. Initial public offerings of company stock, called IPOs, allow you to get in on the company stock from the day it is issued. This can be a great way to get a better return on your investment, but these offerings also carry a higher degree of risk as well. Because they are newly public, there may not be much history or financial information available about the company to thoroughly research and evaluate the strength of the alternative energy investment. IPO prices are usually lower than the price later, so you can get the stock for less, which is another advantage.

Renewable energy IPO investing also has some cons. You could invest all of your capital into a renewable energy IPO just to see the company fold, and a complete loss of your investment capital. The odds against a newly public company and stock is much greater than the odds of success for this same company or stock is. But when the alternative energy investment is a sound one, it can really pay off. There are some things that you can do to better evaluate the renewable energy IPO investments out there, so that you make better investment decisions and minimize your risks. Make sure you understand the concepts and technologies used by any company you invest in. Evaluate the IPO company against similar companies. Look at and evaluate the management team, price earnings ratio, any debt and equity, the price and sales of the company products, and whether the cash flow of the company is negative or positive and by how much. Look at the salaries of the key members of the company, and evaluate whether they are reasonable and in line with others in the same sector. Research what market share the company has, and whether there is growth potential within the company and the sector. Discover whether the company has diversified interests and products, or if they only offer solar power or wind power. The renewable energy market is growing at a rapid rate, and quality alternative energy IPOs can be a very good investment.

Renewable power generation is available using alternative energy sources. Look for companies which do not supply just one renewable energy source. Vesta Wind Systems is a well known company that specializes in wind power, and only wind power. This approach worked well for this specific company, but broad diverse alternative energy companies have a better chance of success in the long run, with fewer risks of a loss. IPO investing may seem tricky at times because these companies are unknown variables, and can go either way. They can end up being a great money maker or a total flop, so these investments can be a gamble. Doing the needed research and analysis on each renewable alternative energy stock can help you tip the odds in your favor that the renewable energy IPOs you choose are sound choices and solid companies. Just because an IPO is being offered by a renewable energy company and you want to invest in alternative energy sources does not mean you should buy. Evaluate IPOs the same as you would any stock, to determine whether the alternative energy investment fits well with your portfolio and investment strategies.

Wind energy technology offers many benefits, and it is a great investment opportunity. Eventually we are going to run out of oil, and by then wind power will already be commonly used by most people in some areas. Wind energy technology does not contribute to global warming or increased pollution of the earth. The energy is clean, and it is sustainable. The advantages of wind power make it one of the more popular renewable resources at our disposal. The future of energy will probably lay in one single source, but rather a combination of sources which will depend on where you live. If this is the case, wind energy technology will play a large part in this combination. Right now America produces one of the largest amounts of wind energy out of the entire world. But more needs to be done, and with a change in leader America is looking towards a cleaner future that includes a large increase in wind energy. This means that wind energy stocks and wind energy ETFs are going to be a good opportunity to make an investment in the future and get something back for your efforts when the value of your investment grows. Continue Reading »