4 choices of alternative energy funds for World Wind Day
The Wind Day was organized by WindEurope and the Global Wind Energy Council (GWEC) for the first time in 2007 to highlight wind energy and its benefits for the population through a series of activities. However, it was not until 2009 that the event became a global phenomenon and was renamed World Wind Day. Indeed, every year on this day, various activities are organized to raise awareness of the importance of wind energy in overhauling energy systems and decarbonizing economies.
Wind power is one of the best alternatives to fossil fuels because it is clean, renewable, widely distributed, produces no emissions during operation and uses little land. In addition, it is one of the oldest ways to harness energy. It was used to propel ships and later became useful for generating electricity. In recent years, in an effort to prevent rapid climate change and reduce carbon emissions, countries have adopted renewable forms of energy such as wind and solar. In fact, according to the International Renewable Energy Agency (IREA), wind and solar power accounted for 82% of new electrical installations in 2020.
Several energy giants like Dominion Energy have started issuing green bonds and plan to spend more than $ 26 billion to harness clean energy and adopt wind and solar systems over the next five years. In fact, the company spends a large portion of this amount in the construction of offshore wind turbines. Its major project off Virginia Beach is slated for completion by 2026 and will be America’s largest offshore wind farm with around 180 turbines, enough to power 660,000 homes.
The US government has been very supportive of the clean energy transition. The Department of Energy (DOE) and the White House have made it clear that offshore wind projects will bolster the country’s energy infrastructure, in fact calling it a centerpiece of its plan to become a net zero emission country. by 2030. Deploy 30 gigawatts of offshore wind power by 2030 that will light 10 million American homes and reduce carbon dioxide emissions by 78 million metric tonnes, and icing on the cake, will create 77,000 new jobs.
4 fund choices
On this World Wind Day, let’s pick up these four alternative energy funds that can have a positive impact on the environment and generate splendid returns. What else? These funds have a Zacks # 1 (strong buy) or 2 (buy) mutual fund ranking and are showing encouraging returns over three and five years. In addition, the minimum initial investment is $ 5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of Zacks’ Mutual Fund Rankings is to guide investors in identifying potential winners and losers. Unlike most fund rating systems, Zacks’ mutual fund ranking does not focus only on past performance, but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and portfolio diversification without multiple commissions associated with stock purchases are the main reason to put money in mutual funds (read more: Mutual Funds: Benefits, disadvantages and how they make money for investors).
New Class A alternative funds NALFX aims for long-term capital appreciation with income being the secondary objective. The fund invests in common stocks of YieldCos, American Depository Receipts, real estate investment trusts and listed master limited partnerships.
This Zacks Sector – Other product has a history of positive total returns for over 10 years. Specifically, NALFX has three- and five-year returns of 29.4% and 20.8%, respectively. To see how this fund has performed against its category and other ranked 1 and 2 mutual funds, please click here.
NALFX has an annual expense ratio of 0.96% compared to the category average of 1.26%. In addition, the fund has significant investments in alternative energy companies like Innergex Renewable Energy, Vestas Wind Systems and Nextera Energy.
Calvert Global Energy Solutions Fund Category A CGAEX aims to track the performance of the Calvert Global Energy Research index. The fund invests the majority of assets in companies primarily engaged in sustainable energy solutions. The portfolio consists of companies committed to facilitating the transition to a more sustainable economy through the reduction of greenhouse gas emissions and the increased use of renewable energy sources.
This Zacks Sector – Other product has a history of positive total returns for over 10 years. Specifically, CGAEX has three- and five-year returns of 22.1% and 17%, respectively. To see how this fund has performed against its category and other ranked 1 and 2 mutual funds, please click here.
CGAEX has an annual expense ratio of 1.24%, which is below the category average of 1.26%. In addition, this fund has significant investments in alternative energy companies such as First Solar, Nextera Energy Partners and Terraform Power.
Fidelity Select Utilities Portfolio FSUTX aims for capital appreciation. This non-diversified fund invests the majority of its assets in common stocks of companies primarily engaged in the utilities sector and of companies that generate most of their income from utility operations.
This Zacks – Utilities sector has a history of positive total returns for over 10 years. Specifically, FSUTX has returned 9.6% and 10.3%, over the past three and five years, respectively. To see how this fund has performed against its category and other ranked 1 and 2 mutual funds, please click here.
FSUTX has an annual expense ratio of 0.76%, which is lower than the category average of 0.95%. Additionally, this fund has significant investments in alternative energy companies such as Clearway Energy, Vistra Corp, Nextera Energy and Sunnova Energy.
Franklin Utilities Fund Class A1 FKUTX aims to provide capital appreciation and current income. The fund invests the majority of its assets in equity securities of utility companies that provide electricity, natural gas, water and communications services to the public and businesses.
This Zacks – Utilities sector has a history of positive total returns for over 10 years. Specifically, FKUTX has returned 11.5% and 8.9% over the past three and five years, respectively. To see how this fund has performed against its category and other ranked 1 and 2 mutual funds, please click here.
FKUTX has an annual expense ratio of 0.73%, which is below the category average of 0.95%. In addition, this fund has large investments in alternative energy companies such as Sempra Energy, Nextera Energy and Xcel Energy.
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