How To Invest Responsibly With The 'Clean & Green' ETF

As the world population continues to grow, particularly in heavily-populated emerging market countries like China and India, global energy demand will expand to become a major issue in the future. However, the problem will not simply be how to tackle exploding demand, it will be how to meet the world’s booming energy demands in a responsible way that is healthy for both the environment and the human race.

A Better Solution

Today, the majority of the world’s energy is produced from fossil fuels like oil, natural gas and coal that release harmful greenhouse gasses into the atmosphere when they are burned. Fortunately, there are plenty of companies out there using technology to develop viable alternative energy sources that won’t destroy the planet.

If you are looking for a way to support the companies that are working to produce cleaner, healthier global energy sources, the “Clean & Green” ETF, more commonly known as the iShares S&P Global Clean Energy Index Fd (NASDAQ: ICLN), might be the perfect investment for you.

The ETF is nicknamed “Clean & Green” because it includes shares of 30 innovative companies who are each helping to move global energy in the right direction.

Which companies are included?

“Clean & Green” contains only the top global companies that produce energy from renewable sources like solar and wind. U.S. investors might recognize holding SolarCity Corp (NASDAQ: SCTY), the second largest provider of solar power panels and supplies in the U.S. SolarCity was co-founded by Elon Musk, the billionaire entrepreneur CEO of Tesla Motors Inc (NASDAQ: TSLA) and SpaceX.

However, not all the “Clean & Green” companies are household names to American investors. Energy use in China has tripled since 2000, and China Everbright International, another top “Clean & Green” holding, focuses its efforts on turning waste into energy, generating wind and solar power and cleaning up water and other waste material in the world’s largest emerging market.

Other holdings include Vestas Wind Systems, a Denmark company which produces wind turbines, and Enel, an Italian company which provides hydro, wind, geothermal and solar power in Europe.

Returns

There’s no question that investors can feel good about the companies included in the “Clean & Green” fund, but is it a smart investment to make as well? In the last three years alone, the fund has returned more than 18 percent, according to Morningstar. In addition, the fund’s expense ratio, the amount of money spent on fees and administrative costs, is only 0.5 percent.

Takeaway

The “Clean & Green” fund is only one of the market's many “I believe” investment that allow investors to avoid hundreds of dollars in trading fees and invest in hundreds of stocks they believe in all at once by buying a single ETF.

Disclosure: the author holds no position in the stocks mentioned.