As the green space builds commercial interest and a large roster of public companies, the investment world has become more educated on green mutual funds. What’s more, rising gasoline prices and media attention on global climate change have put eco-friendly investing in the spotlight:
"As soon as this starts hitting our pocket books, we start thinking this isn't a bad idea,” says Lipper senior analyst Tom Roseen. “People want to be more self-sufficient and make the world a better place.”
Thus far, the two funds that have attracted the most attention in the U.S. are the Winslow Green Growth fund and New Alternatives Fund, which is also the oldest. (Read our interview with the founders.)
Winslow Green Growth, a small cap growth fund, places big bets but has delivered big returns.
"By definition of the space we're in, our fund is even more volatile, because we are a concentrated portfolio of companies," says the fund’s manager Jack Robinson. "We place big bets on small companies with big ideas.” Robinson’s favorite companies include First Solarand SunPower.
Since half of Winslow's assets are in companies associated with energy efficiency and the other half in eco-friendly companies outside the green sector, Herbst says Winslow is less vulnerable to government regulation and oil price declines.