Give the Green Fund Some Time: It Might Just Bloom

Investing in a green fund has become increasingly popular as more and more investors have put an emphasis on protecting the environment. The green movement is currently in full swing and more and more people want to get involved. Here are the basics of the green fund and why it might be to your advantage to invest in one.

Green Funds


The term green mutual fund refers to a mutual fund that invests in companies that are socially responsible. These companies typically have  put into place business practices that keep the environment in mind. These companies might be considered green in every aspect of operations, or they might simply be the most green option in a particular industry.

Some of these funds also invest in only things that are considered socially responsible. For example, certain funds might stay away from investing in alcohol, tobacco, or firearms.

Please Your Conscience


One of the main reasons that people invest in these funds is that they want to make a difference in the world. Many investors do not want to invest their money in something that hurts the environment or the world in general. Therefore, by investing in a green fund, they can put their fears to rest and focus on making money. People that invests in these types of funds are typically very socially responsible and look to do their part overall.

Investment Potential


While one of the most important reasons for investing in this fund is to make a difference in the world, you should also know that these types of funds can provide you with a nice return as well. Many of the green funds on the market have brought in some significant returns for their investors. Therefore, green funds make sense from an investment standpoint as well as a social one.

Volatility


With this type of fund, you will want to make sure that you understand the type of volatility that is involved. These funds can experience some pretty substantial growth followed by a big downturn. Many green funds have seen returns be as high as 150%. Then the following year, they might lose 40%. Therefore, in order to successfully invest in this type of fund, you need to have a high risk tolerance.

Growth


If you are an investor that is seeking substantial growth in your portfolio, green funds might be the way to go. When investing in green funds, you will need to take a long-term approach to be successful. A green fund is not something that you can buy and sell quickly. Most investors will need to plan on investing for 5 to 10 years at a minimum if they want to experience growth.

As more and more companies start to become socially responsible, there will be even more great opportunities with this type of fund.

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