How to Invest in Alternative Energy Mutual Funds

Alternative energy sources are increasingly recognized as the only ways to create sustainable energy to meet the world's future needs. Savvy investors have been some of the first to recognize this and many big ones, including Richard Branson and Bill Gates, are now backing alternative energy companies. For regular investors, the investment options are few as many alternative energy companies are not publicly held, but there are a few opportunities.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Solid understanding of the types of alternative energy that currently exist as well as an understanding of where the market is headed
• Broker or investment advisor if you'd rather not make the investment yourself
• Idea of your needs regarding the returns of your investment
• Computer with high-speed access to the Internet

1. Read up on the latest advances in ethanol, electric batteries, solar power and wind energy sources on the Internet or at your library.

2. Go to the Web sites, listed in Resources below, of one of the two main alternative energy mutual funds when you feel you have a solid background. The New Alternatives mutual fund is one choice that allows investors to invest in companies all over the world who are researching and producing better routes to ethanol, solar energy, electric motors, hydroelectric energy, wind power and more.

3. Head next to the Web site for the other main alternative energy mutual fund known as the PowerShares WilderHill Clean Energy Portfolio. PowerShares offers investors the chance to invest in energy-conversion products, solar power, electric energy and more.

4. Order the prospectus for each company.

5. Read each prospectus carefully and decide which fund, if either, is right for you.

6. Contact your broker or investment person to make your initial investment.

Tips & Warnings

• One way to have more choice in your investments is to consider a broader socially responsible mutual fund. These funds allow conscientious investors to invest in a variety of forward-thinking companies. Often among these companies are those dealing in alternative energy.
• Much of the alternative energy information online is put out by the alternative energy companies themselves. Be sure you understand when you're reading information with a company slant.
• Keep in mind that it may not be as easy as you think to invest in alternative energy. Not many major mutual fund companies are ready to focus an entire fund on what they consider to be a relatively narrow sector.

Resources

• Info on the New Alternatives mutual fund can be found here.
• Follow this link for information on PowerShares.