Green Mutual Funds


Green mutual funds are a great tool for green investments
and present an excellent opportunity for conscious investors to make a positive difference for the environment.



No doubt, there is a huge interest among professionals as well as the wider investment community, in making investments in green industries.

Green mutual funds (also called green funds) are just one instrument for green investments.

green seedling
Photo: Matthew Fang

There is no clear-cut definition as to what exactly a green fund is. Many fund managers choose their industries according to a number of different criteria, and are also being guided by investment strategies of each specific fund.

We define green mutual funds as the ones that invest in companies and industries whose aim is to actively improve the current state of the environment by combating major environmental issues such as pollution and global warming as well as developing and introducing new green technologies such as renewable energy.

For example, there are many traditional companies out there which are generally trying to reduce their impact on the environment. This is of course commendable but I would not necessarily call them green because they do not actively invest in environmental solutions.

We discuss in more detail what a green fund is, why invest in mutual funds and how to choose a genuine green fund in our article What is a Green Fund here.

Arguably, the most important industry which green funds invest their money in is renewable energy. But there are, of course, other ones which draw their attention as well.

There are several green mutual funds which almost exclusively invest in environmentally active industries. Here are some of them:



This list of green funds presents a breakdown of industries that each of the above mentioned funds invest in.

There will be new green funds appearing all the time, so it is important to keep an eye on new developments in this area.

Green funds hold a big promise both for investment returns as well as for helping to develop true environmental solutions.

But like with any other investment there will be associated risks, and due diligence and caution should always be applied.






Last update: April 2009