
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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In breaking investment news, it has recently been reported that in the second quarter of 2010, venture capitalists invested 6.5 billion US dollars into various deals. Compared to the first quarter, the total investments measured in the second quarter increased by 22 percent in the number of deals and by 34 percent in terms of dollars. According to the President of NVCA, Mark Heesen, the exit market has just recently began to show some real signs of life, and venture capitalists can now look into new investments, which may lie outside of their current portfolio. This dynamic has created momentum in the early stage sectors, in which there are great opportunities and reasonable valuations. Life science and alternative technology sector investments, which are usually more capital intensive and longer term, are balanced by smaller information technology sector deals. This creates an abundance of opportunities for venture capitalists, entrepreneurs, and limited partners.
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The Chairman of the Federal Reserve said this week that the markets are “unusually uncertain”, which basically means that he has no idea what is going to happen. The markets promptly fell on Monday and closed in the red. On Tuesday and Wednesday, however, buyers stepped up and stocks were driven up.
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T. Boone Pickens has achieved a lot in his 82 years. He was a corporate raider, a billionaire investor, and, most importantly, a wind natural gas proselytizer. But through it all he has stayed an oil and gas man. Pickens warned about the dangers of investing in alternative energy stock, especially during the difficult times in the industry.
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#1. Longevity and durability. Solar panels have an average life span of about 30 years. After installing just a few panels, you can begin powering your home with renewable energy. Moreover, solar panels are designed to be used in climates that are considered harsh. A common misconception is that direct sunshine is necessary to convert the energy to electricity. In reality, even on a cloudy day solar panels are able to convert solar energy into thermal or electrical power (just not in the same capacity).
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To invest in wind power, for starters, you should find publicly-owned companies with interests in wind power. Public companies are split into two categories. One is referred to as “pure play”, and their business is focused solely on wind power. The other category consists of diversified corporations, which operate in various fields, some of which include wind power holdings. All wind power investments are made through these two categories of business.
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Solar power is becoming more and more popular in nanotech space and the Green Tech. There is solar-cell paint, solar-cell shingles for roofs, and even solar-powered backpacks, which can charge a mobile phone if left in the sun. The question is how to be smart about which products to invest in. How can one effectively invest in solar power?
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1) Keep an Eye on the Prices of Crude Oil
The higher the prices of crude oil become, the more sense alternative energy investment makes. Whereas wind power has almost on par with natural gas, resources such as hybrid automobiles and solar panels remain rather costly. The world is slowly coming out of the Great Recession, with high unemployment and quite low consumer spending. This, of course, affected crude oil prices. In fact, in May the price of crude oil fell substantially from over $90 a barrel to less than $70 a barrel. Nevertheless, as the economy continues to recover, crude oil prices will start to climb again. Moreover, the true impact of the Gulf oil spill on the price of crude oil is yet to be seen. Since it hit a low of less than $70 a barrel at the end of May, we have already seen the price climb again to $80 a barrel. If the price of crude oil stabilizes at $75 a barrel, alternative energy investments will become more feasible and attractive.
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It would seemingly be safe to presume that alternative energy sources such as biofuels, wind and solar would have benefited greatly from the BP oil spill disaster.
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If you are a private citizen or a company currently researching altenative energy, you must investigate and understand the qualifying factors before your invest your dollars. While the government has expanded alternative energy areas and is offering billions of dollars in grants, loans and tax credits, there are defined lines of criteria that you must meet in order to have your submission accepted.
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