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The Top Alternative Energy Mutual Funds – 4 Tips on How to Evaluate Them

Sick of the numerous fees that super-earning mutual fund managers get to put towards their new BM? Well then you are not the only one, and for that reason many investors have turned to EFT’s. However, it is important to keep in mind that unlike many standard mutual funds, the evidence suggests that in the renewable energy sector the active management of mutual funds means that they outperform ETF’s. The top mutual funds can be a great bet for investors “with a conscience” or simply for investors who think that they are a good bet.

So you want to invest, but you do not know what to do to find the best performing mutual funds, this article discusses 5 important points that you need to keep in mind.

1 – Diversification

Green mutual funds tend to be catagorized into “clean energy” and “cleantech” and “domestic” and “global”. Most mutual fund investors are looking to achieve quick and easy diversification and for this reason global funds tend to be more popular than domestic ones. Cleantech is a broader sector than clean energy, so if you want maximum diversification this is a preferance too. This though dilutes your energy sector exposure.

2 – Fund Costs

Investors into alternative energy mutual funds will pay a number of fees and expenses. This is the nature of actively managed mutual funds and is unavoidable. There are one-time transaction costs involved in the set up of funds, hence the expense ratio will decrease the longer your money is left in the fund.

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The information supplied in this article is not to be considered as medical advice and is for educational purposes only.