Saturday, November 1, 2008

Green Investing Part 4: Top Green Funds and Resources

Green funds and Socially Responsible Investing (SRI) are a broad group of rapidly growing investment options, but not all Green investment opportunities are created equal. For example, in Europe, Green funds saw huge sell-offs in March 2008 with funds in the sector recording €293m ($453m) in asset withdrawals. Although the sector was hit with large withdrawals overall, some funds performed well during this contraction (e.g., New Power and Equity Climate Invest). Overall investors are bullish when it comes to SRI. A 2008 Thomson Reuters Extel Survey of over 7,500 investment professionals from 63 countries identifies SRI as one of the most important growing trends amongst fund managers. The survey said 64% of fund management firms now run up to 5% of their total assets on an SRI basis, as opposed to 47% in 2007. In addition, 87% of respondents said they expect increasing SRI involvement over the next 12 months.

France’s Société Générale came out on top, leap-frogging last year’s best SRI research house Citi, which came in second. Paris-based Cheuvreux, the brokerage and research arm of Crédit Agricole, was placed third. The voting was conducted by over 1,600 buy-side firms, 150 brokerage firms/research houses and 450 of Europe’s largest quoted companies. All data, votes received and methodology applied were independently checked and verified by Deloitte. Other top performers include the following five funds.

Calvert Funds is one of the largest active managers of SRI mutual funds, offering both index-based and actively managed socially conscious funds. Calvert Large Cap Growth Fund [symbol: CLGAX] has outperformed the S&P 500 over the last five years.

Launched in 2001, Winslow Green Growth [symbol: WGGFX] is annually the best performing green fund over the past five years. This small-growth fund invests in domestic companies that that are either in specific green sectors or have shown strong environmental responsibility. Its creators are about to launch a second green fund, called the Winslow Green Solutions Fund.

Founded in 1982, The New Alternatives Fund [symbol: NJALFX] holds companies—both overtly green and less visibly so—that it believes “have a positive impact on the environment.” Many of its holdings are in the renewable-energy space, but it also invests in natural foods companies (like Whole Foods) and those involved in clean water and clean air.

Green Century Funds manages two green funds. Started in 1991, they offer the Green Century Equity Fund [symbol: GCEQX] and Green Century Balanced Fund [symbol: GCLBX]. Both funds seek to track the Domini 400 Social Index Fund, which screens out companies involved in socially or ethically unacceptable areas (alcohol, tobacco, firearms, etc.) and screens in companies with positive environmental, social and governance (ESG) performance. Green Century is nonprofit and promises that its fees and profits are used to preserve and protect the environment.

Powershares Wilderhill Clean Energy [symbol: PBW] is an exchange-traded fund (ETF) that focuses on companies that promote cleaner energy. Founded in March 2005, the fund seeks to mirror the Wilder Hill Clean Energy Index. Other “green” ETFs currently available include WilderHill Progressive Energy Portfolio [symbol: PUW], which focuses on companies that that provide technologies that improve the use of existing fossil fuels, PowerShares Cleantech Portfolio [symbol: PZD],

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