Best No-Load Alternative Energy Mutual Funds, Part2 - GAAEX

Today we'll continue our look at the best no-load alternative energy mutual funds and ETFs with an analysis of the Guinness Atkinson Alternative Energy Fund (GAAEX).

The Guinness Atkinson Alternative Energy Fund seeks long-term capital appreciation by investing in equities of businesses that are involved in alternative energy or energy technology sectors. They believe that a growing demand for energy, limited power production capacities, rising energy costs and environmental awareness are going to lead to profits for these businesses and the alternative energy mutual funds that invest in them.

The Guinness Atkinson Alternative Energy Fund provides investors with the opportunity to take part in the shift toward alternative and renewable energy sources. Typically, the fund invests 40 to 60 stocks of companies that receive more than half their revenues from alternative energy or alternative energy technology.

Alternative energy typically includes power created through solar, hydroelectric, wind, biomass, biofuels, geothermal and tidal waves. Alternative energy technology includes the technologies that allow us to tap into alternative energy sources whether through storage and transportation, and technologies that can enable us to conserve energy or allow more efficient use of energy.

The Guinness Atkinson Alternative Energy Fund invests in securities of foreign countries and may have additional risk and volatility due to political, economic and currency risks and differences in accounting methods. The Guinness Atkinson Alternative Energy Fund is a non-diversified fund. This means that the funds assets are concentrated in relatively few companies which will increase both the opportunity for gain and the risk of loss.

The Guinness Atkinson Alternative Energy Fund invests a significant percentage of its assets in Solar (46.8%), Wind (28.45$) and Hydro (9.48) sources. Its top ten holdings as of 12/31/2008 are SMA Solar Technology Ag (4.34%), JA Solar Holdings Co. Ltd (4.06%), Q-Cells AG (3.94%), Solarworld AG (3.9%), Echelon Corporation (3.81%), SunPower Corporation (3.75%), Iderdola Renovables (3.67%), Vestas Wind systems A/S (3.66%), Suntech Power Holdings Co. Ltd. (3.66%), First Solar, Inc. (3.50%).

Due to the funds lack of diversification and propensity for investing in small companies the fund has recently seen greater losses than the market as a whole. This is to be expected. I would further expect the fund to achieve greater gains during upswings.

The funds expense ratio is a relatively low 1.69%, and there is no sales fee. As the economy recovers, this may become one of the highest returning alternative energy mutual funds available on the market.

We will continue our analysis of the best no-load alternative energy mutual funds with Invesco Powershares Global Clean Energy Portfolio (PBD).

Best No Load Alternative Energy Mutual Funds and ETFs

While researching I found an article on the best no load alternative energy mutual funds on www.top-no-load-mutual-funds.com. I like what they have to say about the funds but I would like to delve into each individual fund a little deeper. Over the next week or so I will be reviewing these funds and adding in a few of my own.

So here goes:

#1: Calvert Global Alternative Energy Fund (CGAEX): This is a nice clean, green socially responsible alternative energy mutual fund, but I am not sure that I would consider this the absolute best no-load alternative energy mutual fund.

The investment objective of the Calvert Global Alternative Energy Fund is to gain long-term growth of capital by investing in equity securities of businesses that are engaged in alternative energy and meet the social criteria of the fund. The fund invests in companies both inside and outside of the United States.

The alternative energy sources that the mutual funds invest in include renewable sources such as wind, solar, biofuel and geothermal, technologies that allow us to tap these resources, and services and technologies that enable greater efficiency in the use of energy.

The no-load alternative energy mutual fund is subject to the risk that stocks in the energy sector are subjected to and has the possibility of declining in value. The companies involved in alternative energy are typically more volatile than companies involved in other business sectors and as a result alternative energy mutual funds may be more volatile than the market as a whole. This can result in increased gains or losses.

The largest alternative energy sector that the mutual fund invests in is wind energy (36.4%), followed by Solar (21.7%) and Alternative Energy Utilities (14.0%). The top ten holdings within the fund are Iberdrola Renovabl (7.38%), EDP Renovaveis SA (6.68%), FPL Group Inc (5.39%), Scot + Southern EN (5.24%), Gamesa Corp Tecno (5.22%), Vestas Wind Systems (4.05%), Kyocera Corp (3.81), Johnson Matthey (3.76%), Renewable Energy (3.73%) and First Solar Inc (3.70%). There are currently 60 issues within the portfolio.

The minimum Initial Investment in the fund is $2,000 ($1,000 within an IRA) with subsequent minimum investments of $250. The expense ratio of the fund is 1.85%.

The fund has lagged slightly behind the Lipper Global Natural Resources Index, but that may be attributable to the funds lack of diversification and volatility. Basically, when the market as a whole is doing well the fund should exceed the indexes and during bad times the fund will experience greater losses. As the market turns around I would expect to see better than average returns for the Calvert Global Alternative Energy Fund. It is one of the better managed no-load alternative energy mutual funds.

Next we'll look at the Guinness Atkinson Alternative Energy Fund, GAAEX.

Green Mutual Funds/Alternative Energy Mutual Funds and Socially Responsible Investing

Green mutual funds and alternative energy mutual funds both fall under the category of socially responsible investing (SRI). Socially responsible investing is known for trying to maximize the "social good" as well as the investments financial return. SRI achieves it's goals through investing in companies that display a social consciousness and ethical business practices that try to make the world a better place. Generally, the socially responsible investor shows favoritism towards companies that provide consumer protection, human rights, social welfare or a cleaner/healthier environment. A recurring theme of socially responsible investments is that you can "do well by doing good."

Green Mutual Funds, or green funds, are environmentally friendly mutual funds offered by investment companies such as Calvert and Winslow, invest in companies that operate in a environmentally responsible manner. The companies that green mutual funds invest in usually do their best to ensure that their day to day operations have as little negative effect on the environment and produce as little pollution as possible. Many of these companies also provide products and services that are aimed at making the world a cleaner, greener place.

Alternative Energy Mutual Funds, also known as renewable energy funds, invest in companies that are working to provide power from clean, renewable energy sources such as wind and solar power. Typically, the companies that alternative energy mutual funds invest in help provide electricity at reduced costs and help us move away from our dependence on fossil fuels, reducing pollution in the process.

As the world's demand for energy increases and we all become more environmentally aware the companies that alternative energy mutual funds are expected to become more and more profitable, leading to a strongly positive long term outlook for most alternative energy mutual funds.

If you are looking for areas to invest your money while still maintaining a positive environmental outlook you should strongly consider investing in green mutual funds and alternative energy mutual funds. Green Mutual Funds and Alternative Energy Mutual Funds are great ways for you to earn a little green while keeping the earth green.

Environmentally Friendly Mutual Funds

Many people have asked me if there are any environmentally friendly mutual funds on the market. The answer is a resounding YES! We keep stressing the point that you can earn handsome profits from investing in companies that are environmentally friendly, whether through their business practices or through the products and services that they sell.

For many people, finding individual companies to invest in can be quite difficult. Everyone knows that diversification is very important to reduce the amount of risk that your investment portfolio incurs. Because of limited funds and lack of information most investors will find it difficult to find stocks to buy that will be profitable and provide enough diversification. Environmentally friendly mutual funds do this work for you. The search for businesses that are expected to be profitable, conduct their business in ways that limits the negative effects on the Earth and may even produce products or services that help make the world a cleaner place.

Environmentally friendly mutual funds are normally classified in the investment subsection called green mutual funds. There are many different environmentally friendly mutual funds available that would be considered green mutual funds.