10 Best Renewable Energy Mutual Funds To Consider in 2022

Skyrocketing oil prices and the war in Ukraine are once again showing the importance of transitioning to clean energy. Here is the list of the top ten green mutual funds you should consider as a clean energy investor.

Anna Ng   Updated March 24th, 2022

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What mutual funds invest in renewables?

High oil and gas prices are offering an opportunity to investors in wind, solar, the electrification of transport, batteries, energy storage, and more.

Mutual funds let you invest in a collection of renewables stocks without having to pick individual names. Although mutual funds have been losing ground to exchange-traded funds (ETFs) for decades, some of these actively managed funds have managed to attract and retain investor money.

Here are the largest green mutual funds available to U.S. investors.

Renewable energy mutual fund list

  • Pax Global Environmental Markets Fund (PGRNX)
  • GMO Climate Change Fund (GCCHX)
  • Fidelity Select Environment and Alternative Energy Portfolio (FSLEX)
  • New Alternatives Fund (NALFX)
  • Goldman Sachs Clean Energy Income Fund (GCEJX)
  • Shelton Green Alpha Fund (NEXTX)
  • Calvert Global Energy Solutions (CGAEX)
  • Hartford Climate Opportunities Fund (HEOMX)
  • Guinness Atkinson Alternative Energy Fund (GAAEX)
  • Fidelity Climate Action Fund (FCAEX)
FundTickerExpense RatioAssets ($m)2022 Performance (YTD)
Pax Global Environmental Markets FundPGRNX1.20%2,440-13.5%
GMO Climate Change FundGCCHX0.78%8122.6%
Fidelity Select Environment and Alternative Energy PortfolioFSLEX0.85%756-10.3%
New Alternatives FundNALFX0.96%433-2.7%
Goldman Sachs Clean Energy Income FundGCEJX1.01%358-0.5%
Shelton Green Alpha FundNEXTX1.16%297-9.5%
Calvert Global Energy SolutionsCGAEX1.24%227-8.0%
Hartford Climate Opportunities FundHEOMX1.19%134-9.6%
Guinness Atkinson Alternative Energy FundGAAEX1.98%27-11.6%
Fidelity Climate Action FundFCAEX1.05%20-11.9%

Learn more about each fund.

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Pax Global Environmental Markets Fund (PGRNX)

  • Assets under management: $2.4 billion
  • Expense ratio: 1.20%

Launched in 2008, Pax Global Environmental Markets Fund (PGRNX) is the largest renewable energy mutual fund with over $2.4 billion in assets. It invests in companies focused on alternative energy and energy efficiency; water infrastructure and pollution control; waste management technologies, and sustainable food, agriculture and forestry.

Importantly, the fund managers seek to invest in profitable companies with attractive valuations. (Many clean energy companies are unprofitable and trade at high valuations.) The team also cares about environmental, social, and governance (ESG) factors.

PGRNX invests in around 50 stocks, split almost evenly between U.S. and foreign markets. The fund managers like industrials (40-50% of assets) and technology and avoid energy, communications, and consumer stocks. The top three investments are Linde Plc, an industrial gas giant with a hydrogen business, Waste Management Inc, and American Water Works, a water utility.

PGRNX returned 13.5% over the past three years and 11.1% on average over the past five years. According to Morningstar, the fund has outperformed its global benchmark (though not the domestic S&P 500 index) over the past three and five years.

The minimum to invest in the fund is $1,000. However, it is very pricey with a 1.20% annual management fee.

GMO Climate Change Fund (GCCHX)

  • Assets under management: $812 million
  • Expense ratio: 0.78%

The GMO Climate Change Fund (GCCHX) invests in companies that benefit from curbing climate change. This includes stocks in clean energy (wind, solar, biofuels, and batteries), energy efficiency, agriculture, and water. Because climate is a global issue, the fund’s investments are split evenly between domestic and foreign stocks.

As of March 2022, GCCHX had over 100 investments, mostly in stocks of industrials, basic materials, and technology companies. The top three included biofuels supplier Darling Ingredients, graphite electrode manufacturer GrafTech International, and renewable energy stock Ameresco Inc.

GCCHX did pretty well over the past three years, returning 24% on average. It costs 0.78% annually to invest.

Fidelity Select Environment and Alternative Energy Portfolio (FSLEX)

  • Assets under management: $756 million
  • Expense ratio: 0.85%

Launched in 1989, FSLEX invests in companies involved in renewable energy, energy efficiency, pollution control, and other environmental activities. The fund manager mostly seeks out domestic stocks, with a preference for technology and industrials. As of March 2022, the fund held 63 companies, though the top ten represented nearly 60% of the assets.

The list of FSLEX’s holdings may surprise you. Although the top ten stocks include Tesla and green utility NextEra Energy, the largest holding is Microsoft. The software giant is around 13% of the fund’s assets, and it’s not quite clear what the connection to alternative energy is.

FSLEX returned 14.6% annually over the past three years and 12.2% over the past five years, failing to beat the S&P 500 Index.

There is no minimum investment, and the fund costs 0.85% annually.

New Alternatives Fund (NALFX)

  • Assets under management: $433 million
  • Expense ratio: 0.96%

Launched n 1982, the New Alternatives Fund (NALFX) is a socially responsible mutual fund focused on renewable energy. The managers try to pick companies with a positive environmental impact, investing in solar, wind, hydro, biomass, energy conservation, fuel cells, recycling, clean water, wind, and geothermal.

In March 2022, NALFX had 40 investments, mostly in green utilities (70% of assets) and industrials. The top three holdings were clean energy utilities Iberdrola, Clearway Energy, and Enel Spa. Only around one-third of invested assets were in U.S. companies.

NALFX returned 23% annually over the past three years and 17% over the past five years, beating the global small and mid-cap stock category, according to Morningstar.

The minimum initial investment is $2,500, and the fund’s fees (0.96%) are average for an actively managed mutual fund.

Goldman Sachs Clean Energy Income Fund (GCEJX)

  • Assets under management: $358 million
  • Expense ratio: 1.01%

The Goldman Sachs Clean Energy Income Fund (GCEJX) was launched recently, in 2020. The fund positions itself as an income fund, letting investors earn a stable income stream. To achieve that goal, GCEJX mostly buys clean energy infrastructure stocks. Clean energy utilities are not very exciting, but they enjoy long-term contracts and established business models.

As of March 2022, GCEJX had 57 holdings, largely utility companies. The top three were NextEra Energy, Northland Power, and NextEra Energy Partners. The fund invests in both U.S. and foreign stocks, split roughly equally.

As a new fund, GCEJX has yet to earn a track record, but it was flat in both 2021 and in 2022 year-to-date. This is not bad considering the sell-off in clean energy stocks.

This actively managed fund costs 1.01% annually and earns a 3% dividend yield.

Make an impact with your money

Best robo-advisor for green investing

Fees

0.25%

Minimum

$10


Get a green credit card

Fees

$60/year

Minimum

$0

Build custom portfolios for free

Fees

$0

$125 for M1 Plus

Minimum

$100

Save and invest spare change

Fees

$3-$5 / month

Minimum

$5

Work with human advisors

Fees

0.49%-0.89%

Minimum

$100,000

Shelton Green Alpha Fund (NEXTX)

  • Assets under management: $297 million
  • Expense ratio: 1.16%

The Shelton Green Alpha Fund (NEXTX) invests in green economy stocks that are reasonably valued and have above-average growth potential. The fund mostly buys U.S.-based companies in the technology, healthcare, and real estate industries.

In March 2022, NEXTX owned around 60 stocks. The top three were Tesla, vaccine-maker Moderna, and JinkoSolar, a Chinese solar panel maker. Given the emphasis on the environment, it is interesting that the fund owns a sizable number of biotech companies, which also include CRISPR Therapeutics.

NEXTX did deliver strong performance over the past three and five years, returning 33% and 23% annually, respectively. The fund costs 1.16% a year, slightly above the average for mutual funds.

Calvert Global Energy Solutions (CGAEX)

  • Assets under management: $227 million
  • Expense ratio: 1.24%

Launched in 2007, the Calvert Global Energy Solutions (CGAEX) is run by Calvert, an asset manager exclusively dedicated to environmental, social, and governance (ESG) investing. CGAEX invests in renewable energy producers, energy technology and efficiency providers, and energy use leaders. The fund is very diversified globally, with only about a third of its assets in U.S. companies.

As of March 2022, CGAEX owned 163 stocks, mostly industrial, tech, and utility companies. The top three were Delta Electronics, ON Semiconductor, and LG Chem.

The fund is very diversified. The top ten holdings are less than 10% of the fund, which is unusual for clean energy funds, many of which are very concentrated.

CGAEX returned 23% and 15% annually over the past three and five years, respectively. According to Morningstar, the fund did much better than its global small and mid-cap stock benchmark.

The minimum investment is $1,000, and the fund charges 1.24% annually.

Hartford Climate Opportunities Fund (HEOMX)

  • Assets under management: $134 million
  • Expense ratio: 1.19%

Launched in 2016, the Hartford Climate Opportunities Fund (HEOMX) invests in global stocks that “could benefit from efforts to mitigate or adapt to climate change.” The key themes are clean energy, environmental resource management, energy efficiency, sustainable transport, low carbon leaders, and climate-resilient infrastructure.

HEOMX currently owns around 100 stocks, mostly industrials, utilities, and technology companies. The top holdings include National Grid, Johnson Controls, and Siemens AG. Alphabet (Google) and Microsoft also make it into the top ten, though they don’t seem to be as relevant to climate change. Roughly half of the stocks the fund owns are in foreign markets, mostly Europe and Japan.

The fund returned 19% and 13% annually over the past three and five-year periods, respectively, beating the Morningstar benchmark. However, HEOMX is quite expensive (1.19%).

Guinness Atkinson Alternative Energy Fund (GAAEX)

  • Assets under management: $27 million
  • Expense ratio: 1.98%

The Guinness Atkinson Alternative Energy Fund (GAAEX) specializes in investments in alternative energy and energy technology sectors. They target investments in solar, wind, hydroelectric, geothermal, biomass and biofuel energy. They also invest in technologies that enable more efficient energy use.

As of March 2022, GAAEX owned only thirty stocks, half domestic and half foreign. The fund is very concentrated: the top ten stocks are over 40% of its assets. The top three holdings include semiconductor companies ON Semiconductor and Sensata, as well as green utility NextEra Energy. The fund’s top sectors are tech (over a third of its assets) and utilities.

GAAEX returned 27% and 18% annually over the past three and five years, respectively, easily beating its benchmark.

The minimum initial investment is $5,000, and the fund charges a whopping 1.98%, nearly twice the mutual fund average (and 10x as much as what some ETFs charge.) Guinness Atkinson recently launched an ETF version of this fund, the SmartETFs Sustainable Energy II ETF (SOLR). SOLR has the same holdings and looks like a much better deal considering its 0.79% expense ratio.

Fidelity Climate Action Fund (FCAEX)

  • Assets under management: $20 million
  • Expense ratio: 1.05%

A new launch from Fidelity, the Fidelity Climate Action Fund (FCAEX) has about $20 million in assets under management. FCAEX seeks to invest in “climate-aware companies.” Fidelity defines these companies as companies that are working to address climate change “either indirectly through their corporate strategy, or directly through the technology, services, or products they provide.”

In practice, FCAEX has over 90 holdings diversified by industry and geography. However, most of the top ten don’t have much to do with climate change. The top three investments are Microsoft, Alphabet, and Home Depot, so we wonder if there are more climate-aware companies out there.

Like other Fidelity funds, FCAEX doesn’t have a minimum initial investment. It costs 1.05% annually. It’s too early to tell if the fund’s track record will justify its fees. Launched in 2022, the fund is already down nearly 12% year-to-date.

💰 Which renewable energy mutual fund is best?

  • The Pax Global Environmental Markets Fund (PGRNX) has delivered a strong performance for investors over its long history.
  • If you want a less volatile fund, consider the newer Goldman Sachs Clean Energy Income Fund (GCEJX), which seeks to generate income for investors by buying more predictable clean energy utilities.

🔔 Can’t decide between ETFs and mutual funds? Check out this list of clean energy ETFs.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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