The alternative energy industry is growing rapidly. Individuals and governments have increased their energy use from renewable sources such as solar, wind, water, geothermal, etc. By 2026, experts predict renewable energy capacity to increase by 60%. Due to this prediction and the current increase in energy usage from renewable sources, investors are increasingly focusing on alternative energy companies as potential long-term generators of profit and revenue growth. Famous alternative energy companies in the industry include Enphase Energy Inc., First Solar Inc., and SunPower Corp. The top alternative energy mutual funds for 2024 allow investors professional exposure to clean energy companies involved in the business of electricity generation from solar, wind, hydroelectric, hydrogen, and geothermal sources. Some of these funds go beyond just clean energy and have biotech holdings. If you’re looking to invest in alternative energy mutual funds, consider the following mutual funds as options.
The world’s current rate of fossil fuel consumption puts us on track toward a rapid depletion of these non-renewable resources. If we are not careful about how much we consume, we will soon run out of these resources. We won’t have oil, natural gas, and even coal.
Burning fossil fuels also harms the environment. Fossil fuels wreak havoc on the Earth’s natural systems, from the ocean and air pollution to the destruction of entire ecosystems.
With alternative sources of energy, we can decrease our dependence on fossil fuels like coal, oil, and natural gas. Alternative energy refers to energy produced from all sources other than fossil fuels. Consuming alternative energy has a low environmental impact.
What Is An Alternative Energy Mutual Fund?
An alternative energy mutual fund is a fund that pools money from its investors. It invests the money in a group of companies that, in one way or another, engage in the development of alternative energy resources. Alternative energy resources could include wind, solar, geothermal, etc. Alternative energy mutual funds may also invest in companies promoting a clean environment. For example, there may be a solar plant in Spain producing, say, 11 MW of electricity. Alternative energy mutual funds provide the funds for the construction of renewable energy plants like this.
Alternative energy mutual funds are a relatively new way of investing. To invest, you need to be a shareholder in the fund. As long as the fund doesn’t close, you can buy and sell your shares of stocks whenever you like.
Alternative Energy Mutual Funds 2024
1. Guinness Atkinson Alternative Energy Fund (GAAEX)
The GAAEX fund invests around 80% of its net assets in equity securities of alternative energy companies based in countries all over the world. The companies the fund invests in deal in power generation through solar, wind, hydroelectric, tidal wave, geothermal, biomass, and biofuels.
GAAEX’s top holdings include:
a. FirstSolar – a producer of solar panels, equipment, and infrastructure
b. TransAlta Renewables – a hydroelectric power generation company
c. Iberdrola SA – an electric utility company primarily engaged in wind energy generation
2. Shelton Green Alpha Fund (NEXTX)
This fund achieves long-term capital appreciation by investing in stocks in the green economy. The fund focuses on companies with above-average growth potential.
Under normal market conditions, the fund invests 80% of its assets in US green energy stocks. The companies the fund invests in are working to address global green issues and include:
a. Vestas Wind Systems – a wind turbine company
b. JinkoSolar Holdings – a solar panel manufacturer
c. Brookfield Renewable Corp. – owns and operates renewable power assets
NALFX invests in companies across various industries oriented toward a clean environment. The fund is especially interested in alternative energy. It invests in stocks that manufacture or produce products that benefit the environment and replace fossil fuel usage. The fund considers itself a socially responsible fund. It includes companies like:
a. Orsted A/S – an energy company supplying solar energy and onshore and offshore wind energy
b. NextEra Energy Partners – a producer of wind and solar energy
c. Clearway Energy Inc. – a US-based clean energy company
d. Enel SpA – a green energy company that adopts sustainability-oriented technologies
e. Innergex Renewable Energy Inc. – a developer, owner, and operator of hydroelectric, wind, and solar farms.
We now know that alternative energy sources are any sources that can replace traditional fossil fuels for energy generation. All renewable energy sources fall under the category of alternative energy. However, all alternative energy sources are not renewable sources. It’s possible for sources of alternative energy to be exhaustible.
Nonetheless, investing in companies engaged in producing energy from alternative sources is always a good idea. Any company or fund that is working toward decreasing our dependence on oil, coal, and gas is worth investing in. Our investments give these businesses the opportunity and confidence to continue to make our world a better place for us and for future generations.
Apart from that, alternative energy has been growing since its inception. With the falling costs of renewables, the industry is performing very well. Almost all investors in alternative energy companies record good returns and profits, and predictably so, since our future depends on the alternate energy choices, we make today.
The top cause of climate change is greenhouse gas emissions from electricity generating fossil fuel power plants. Alternative energy sources have much lower emissions than coal, natural gas, and other fossil fuels. Choosing alternative energy over energy from fossil fuels can help slow down and eventually reverse climate change.
Switching from fossil fuels to alternative energy sources also saves lives since it releases a much lesser amount of pollutants. Lives put at risk due to air pollution can be saved.
The growth of the alternative energy industry also increases employment opportunities. Industries need skilled workers to install and manufacture energy systems.
Thus, we can conclude with the knowledge that the top alternative energy mutual funds for 2024 are a good investment option, not only because of the high profits and returns but also because we need companies like these to ensure a clean and green future for our children. The incredible growth of these stocks will encourage more budding industrialists to consider entering the alternative energy industry.