Green Investing


DEFINITION of 'Green Investing'

Investment activities that focus on companies or projects that are committed to the conservation of natural resources, the production and discovery of alternative energy sources, the implementation of clean air and water projects, and/or other environmentally conscious business practices.

Pure play green investments are those that derive all or most of their revenues and profits from green activities. Green investments can also be made in companies that have other lines of business but are focusing on green-based initiatives or product lines.

BREAKING DOWN 'Green Investing'

Green investing can be accomplished through individual securities or through pooled investment vehicles such as mutual funds or exchange-traded funds. This style of investing is an offshoot of socially conscious investing, but neither type of investing implies investments that are safer than a market index such as the S&P 500. In fact, investing in "green" companies can be riskier than other equity strategies, as many companies in this arena are in the development stage, with low revenues and high earnings valuations.

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  1. Does investing in sustainable or "green" companies provide lower returns?

    To determine the kinds of returns that can be expected from investments in sustainable or "green" companies, the distinction ... Read Full Answer >>
  2. Is there a difference between socially responsible investing (SRI) and green investing?

    There isn't a huge difference between socially responsible investing (SRI) and green investing; green investing is actually ... Read Full Answer >>
  3. What are green investments?

    Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the ... Read Full Answer >>
  4. Why are mutual funds subject to market risk?

    Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict ... Read Full Answer >>
  5. Does Fidelity have mutual funds?

    Fidelity offers clients all asset classes of mutual funds, ranging from domestic equity to specialized sectors. The offering ... Read Full Answer >>
  6. How often are mutual fund prices updated?

    A mutual fund's price, or its net asset value (NAV), is determined once a day after the markets close at 4 p.m. Eastern time ... Read Full Answer >>

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