Socially responsible investing (SRI) has gained traction in recent years, particularly as sustainability becomes a core focus in the financial landscape. A key aspect of SRI is the “green” investing sector, which emphasizes financing initiatives that further environmental well-being. This includes ventures in clean energy, sustainable materials, infrastructure development, waste reduction tactics, and consultancy services.
Investing sustainably doesn’t require sacrificing returns for ethics. You can effectively pursue both goals simultaneously. Here are five investment funds that successfully integrate eco-friendly initiatives with financial success.
(When assessing your green investments’ performance, it’s important to note that various sectors often rely on unique indices to measure success within their specific domains. This should guide your portfolio allocation strategy.)
1. Pax World Global Environmental Markets Fund [MUTF: PGRNX]
A favorite among eco-conscious investors, the Pax World Global Environmental Markets Fund is dedicated to fostering long-term sustainable investment growth. This fund uniquely combines financial metrics with environmental, social, and governance (ESG) assessments to select holdings, using a rigorous set of standards. Its strategy has yielded results, boasting an average five-year return of 10.77 percent and consistent outperformance against global market indices, all while maintaining a fossil-fuel-free stance.
2. Guggenheim Solar ETF [NYSEARCA: TAN]
The Guggenheim Solar ETF, aptly marked with a recognizable ticker, serves as an ideal option for solar energy enthusiasts. This exchange-traded fund channels investments into various solar energy sectors, encompassing everything from solar supplies and lighting solutions to essential raw materials and installation services.
3. Pattern Energy Group Inc Class A [NASDAQ: PEGI]
Specializing in independent energy production, Pattern Energy Group primarily concentrates on wind and solar renewable resources. Notably, the company’s latest wind farm covers 150 acres and is designed to produce all the electricity required by Amazon Web Services. Over a three-year span, PEGI has demonstrated stronger performance compared to its competitors. While 2014 was a challenging year for the energy sector overall relative to the S&P 500, recent growth trends indicate a promising outlook for PEGI’s future earnings.
4. Etho Climate Leadership U.S. ETF [NYSEARCA: ETHO]
This ETF targets top-tier companies that maintain low carbon outputs. ETHO is celebrated as “the inaugural diversified index ETF that excludes fossil fuel corporations and the first public investment vehicle to rank stocks largely based on their carbon footprint assessment.” Managed by Etho Capital, it also offers the Etho Climate Leadership Index [ECLI], which benchmarks performance for businesses with minimal carbon emissions in their sectors.
5. Ameresco [NYSE: AMRC]
With a commitment to renewable resources and asset sustainability, Ameresco specializes in performance contracting and advisory services. By assisting governmental bodies in lowering their energy expenditures, they finance their operations while experiencing rapid growth. The firm exceeded earnings forecasts in 2016 and intends to capitalize on its momentum in 2017. An escalating demand for their services is poised to support their expansion plans.
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