The Top 10 Fossil Free Funds to Invest in for 2022

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The world and our society as a whole are evolving. 

In recent years, the way we view our environment and the planet has shifted, and there are now more people than ever before who want to invest their money sustainably. 

But what does it mean to invest your money in a way that is free of fossil fuels? And how do you know if a fund is worthwhile?

In this guide, we’ll look at how to make an informed decision about whether or not to put your money into a fossil-free investment fund.

What is a fossil-free investment fund, and why would you want one?

A fossil-fuel-free investment fund is a type of mutual or managed investment that invests in companies, sectors, and industries to increase their value while avoiding using energy sources such as oil. 

Typically, fossil-free funds invest in renewable energy, green technology, and sustainable manufacturing companies. 

Solar panel manufacturers, electric vehicle manufacturers, wind turbine manufacturers, and energy-efficient appliance manufacturers are all excellent examples of what you might find in a fossil-free investment portfolio.

There are numerous reasons to think about investing in a fossil-fuel-free fund. Some people may want to divest from the fossil fuel industry for ethical reasons. In contrast, others believe that renewable energy is the way of the future and want their money invested in it.

There are a variety of groups and organizations that monitor the fossil fuel industry and those who have divested or intend to divest from fossil fuels. The most well-known organization is 350.org, which has established an investment program called “End Fossil Finance,” where you can learn more about fossil-free funds and the companies in which they invest.

If you decide to put your money into a fossil-fuel-free fund, you should be aware of what you’re getting into. While most of these funds avoid energy investments, some do include oil in their portfolios because so many other businesses rely on it.

It’s also worth noting that some “green” or “environmentally friendly” funds may not have a low carbon footprint. So, before investing, do your homework and ensure that the fund you choose meets your environmental standards.

How do fossil-free investment funds work – and are they worth it?

Fossil-free funds operate in the same way traditional mutual or managed investment portfolios do. The main difference is that they do not invest any of your money in energy sources like oil and gas, but rather in long-term companies that are more likely to grow in value. 

These funds are professionally curated by a group of people who strive to maximize profits for their investors while remaining environmentally conscious.

There are three major advantages to putting your money into a fossil-fuel-free investment fund:  

  • You can avoid indirectly supporting the fossil fuel industry
  • You can invest in green technology and businesses before they become mainstream
  • It is an easy way to decrease your carbon footprint

Fossil-free funds are a great way to make an investment that is good for the environment and also benefits your wallet. They’re one of many ways green-minded people can invest their money in new energy industries without hurting their portfolios.

Comparing fossil-free investment funds (what to look for)

When selecting a mutual fund or managed investment portfolio that invests in the environment, there are numerous factors to consider. 

Each fossil-free fund has its own set of investments and goals. 

Some funds may place a greater emphasis on renewable energy sources, whereas others may favor companies involved in sustainable manufacturing. If all you want is a fund that invests in sustainable businesses, you have a lot of options.

However, if you want your fund to be completely free of any investments in the fossil fuel industry, the number of funds available to you may be more limited. Before investing, you may want to research each fund individually to find one that meets your particular investment needs. 

How do you choose which fossil-fuel-free fund is right for you?

It can be difficult to select the best mutual or managed fund for you. How do you know which one is best for your specific needs when there are so many to choose from?

When looking at fossil-fuel-free investment funds, there are three major factors to consider:

  • The fund’s fees 
  • The fund’s carbon footprint
  • The fund’s performance.

Let’s dive into each factor in turn. 

What are the associated fees of the fund?

Fees are the most important factor to consider when deciding on a mutual or managed fund to invest in. 

There are a variety of fossil-fuel-free investment funds available, with some charging higher fees than others, particularly if they have high-risk portfolios. It can be wise to fully assess what fees you will be paying before you decide to invest, to avoid any nasty surprises further down the road. 

What’s the carbon footprint of the fund?

The second factor to consider when selecting a fossil-fuel-free investment fund is its carbon footprint. 

Not all funds are created equal, and some have larger footprints than others because they invest in less environmentally friendly companies. 

Before making a decision, you may want to take some time to research out exactly how your fund will impact the environment.

How is the fund likely to perform over time? 

Finally, consider the performance of the fund — that is, what can you expect to happen to the money you invest over time?

How much money can you expect to make if you invest in a single fossil-fuel-free fund? Can you spread that across multiple funds? Are there ways to maximize your interest?

Doing your research is the best way to determine which one provides the best return on investment while also having a low carbon footprint.

When searching for a fossil-fuel-free investment fund, keep in mind that there is no one-size-fits-all solution. The right fund for you will likely depend on your environmental priorities, financial situation, and other lifestyle factors. 

Inside the campaign to divest the Catholic Church from fossil fuels |  Earthbeat | National Catholic Reporter

The top 10 fossil-fuel-free funds of 2022

There are many different options to choose from when it comes to investing in a fossil-fuel-free investment fund. To help you get started, we’ve put together a list of the top ten funds available.

Remember, when choosing a fund, it’s important to consider the fees charged, its carbon footprint, and its performance.

Vanguard ESG U.S. Stock ETF

This fossil fuel-free fund tracks the performance of companies with higher ESG ratings. It holds over 600 stocks and has a total expense ratio of 0.09%. 

Vanguard FTSE Social Index Fund

This social index fund is good for investors who want to minimize their carbon footprint while still making an impressive return on investment. The minimum investment is $100,000. 

Blackrock Enhanced Equity Dividend Trust

This fossil fuel-free fund focuses on investing in companies with a higher ESG rating and has an expense ratio of 0.67%. It is also one of the largest funds available to investors; it manages over 15 billion dollars worth of assets across all its investment vehicles. 

SPDR S&P 500 Fossil Fuel Reserves Free ETF

This ETF is designed for investors who want to invest in companies that meet certain environmental, social, and governance criteria. It tracks the S&P 500 and has an expense ratio of 0.20%. 

RobecoSAM Global ESG Leaders Equity Fund

This fossil fuel-free fund is a good choice for those looking for a fund with high growth potential over five years or more. The minimum investment for this managed fund with an expense ratio of 0.79% is $50,000, and the portfolio consists mostly of European stocks. 

Natixis Global Environmental Opportunities Fund

This hedge fund offers investors the opportunity to make money by investing in companies that help create a cleaner, more sustainable world. It has a management fee of 0.75%, and its portfolio is composed of stocks from around the globe. 

Parnassus Endeavor Fund  

This fossil fuel-free mutual fund invests in companies with good environmental policies and practices. The minimum investment for this fund is $500, and it has an expense ratio of 0.92%. 

Calvert Green Bond Fund

This bond fund is a good choice for those looking to invest in environmentally friendly projects. The minimum investment required is $2000, and the fund has an expense ratio of 0.85%. 

DWS Climate Change Equity Fund

This equity fund invests in companies that are working to combat climate change. It has a minimum investment of $1000 and an expense ratio of 0.97%. 

iShares MSCI ACWI ex US ESG ETF

This fossil-fuel-free ETF invests in companies worldwide that meet certain environmental, social, and governance criteria. The fund has an expense ratio of 0.33% and a minimum investment of $1000. 

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