CHICAGO, April 19 (Reuters) – Green stock funds have always
made me blue. There are dozens of socially responsible,
“clean-tech” or environmentally friendly mutual and
exchange-traded funds, but I have a hard time recommending them.
They are typically too expensive because of their fees, have
poor returns and are too concentrated in highly volatile stocks.
Take the PowerShares Wilderhill Clean Energy ETF,
which holds alternative energy/conservation companies based on a
56-stock index. At nearly $140 million in assets, it’s one of
the most popular green funds. Yet volatility and poor
performance in the portfolio’s solar and other alternative
energy stocks have produced awful total returns.
The PowerShares fund is down 24 percent and 27 percent for
the three- and five-year periods through April 17. It has a 0.7
percent annual expense ratio, which is high for an index fund.
More than one-third of the portfolio is in “information
technology” stocks, a category that includes several battered
The Green Century Balanced Fund has performed
better – it is up 7 percent over the past three years, but
expenses weigh in at 1.48 percent per year, and that would
quickly eat away at any return. Over three years, if you had
invested $10,000 in the fund, you will have paid some $468 in
There has to be a better way.
Tom Nowak, a financial planner from Grayslake, Illinois, and
author of “Low Fee Socially Responsible Investing” (Createspace,
2012), suggested I create my own portfolio based on some online