The New Alternatives (MUTF:NALFX) is the first environmental mutual fund, getting its start 30 years ago. It invests in companies that promote recycling, alternative energy, pollution prevention and conservation. Some of its holdings include environmental management service company Veolia Environnement (NYSE:VE) and geothermal firm Ormat Holdings (NYSE:ORA).
NALFX’s poor performance in 2012 is no fluke, either. The fund has averaged an annual return of about -10% in the past five years.
While clean energy likely has a promising future down the road, adoption still has been glacial. Economic woes in the U.S. and Europe could put even more pressure on the industry because of these companies’ reliance on government subsidies.