If you are looking for the best renewable energy ETF to invest in, here is the full list you can choose from (as of 09/25/20). We go over what stood out to us for each fund and group them together based upon their investment philosophies.
We built Carbon Collective because we were looking for the best ways to align our financial and ethical goals around climate change. In the process we’ve seriously “kicked the tires” of every possible way you can invest in renewable energy as an individual.
One of the easiest ways is to let someone else do the hard parts. Sifting through all of the renewable energy stocks out there can be daunting. While it costs more, buying an ETF makes it easy because a fund manager is doing all of the selection for you. You just need to choose which fund to buy.
(Note that in our breakdown of clean energy ETFs we also include nuclear energy.)
Disclaimer: We’re publishing all of the following purely for informational purposes and not a recommendation to buy or sell any individual stock, bond, or fund.
An ETF or Exchange Traded Fund is a collection of stocks and/or bonds that a fund manager selects. Unlike a mutual fund, ETFs are generally “passively” managed, meaning the fund managers infrequently buy or sell stocks within the fund. ETFs are a great option for long term, “buy and hold” investors as they generally have much lower fees than mutual funds and are more tax efficient.
Here’s the full breakdown of renewable energy ETFs.
These ETFs invest in the companies that design, manufacture, and deploy renewable energy generation technology. They define renewable energy to include: wind, solar, hydro, geothermal, biomass, biodiesel, and ethanol.
Do note that at Carbon Collective, we are wary about ethanol. The debate is still unclear on whether it is more carbon efficient overall than gasoline when you look at the fossil fuels used to grow corn.
If you want to invest even more broadly in renewable energy, checkout these ETFs. They include some of the technologies that are pushing the transition to a zero carbon economy. They will invest your savings not just in wind and solar, but in electric cars, batteries, LEDs, and fuel cells.
If you want to learn more about decarbonization, check out Dr. Saul Griffiths handbook for reaching carbon neutrality in the US.
If you want to invest in just the solar or wind energy industry, these two ETFs are your best (and only) options. Each invests in companies that are working just on solar or wind around the world. They have no overlapping holdings, so investing in both could make sense, as well.
We started Carbon Collective after we couldn’t find anywhere to invest our retirement savings that made both ethical and financial sense in the age of climate change.
So we built the world’s first series of climate-friendly, diversified, low-fee investment portfolios and teamed up with a world-class online brokerage platform to automatically manage them.
Imagine an index fund in a world without fossil fuels. That’s how we build our portfolios. We swap the high-carbon parts of the stock market (fossil fuels, dirty utilities, airlines, etc.) with the companies building solutions to climate change (renewable energy, circular economy, energy efficiency, etc.).
Check out their historical performance, carbon footprint, and fees compared to common standard and ethical portfolios. And learn more about green 401(k) plans for employers.