Are there renewable-energy stock funds?
The Answer Guy comes up with two options - and one big risk. Plus: How to judge target-retirement funds.
By George Mannes, Money Magazine senior writer

(MONEY Magazine) -- Question: Is there a pure-play energy fund that invests only in renewable-energy stocks like solar, wind, hydroelectric and biofuels? I usually prefer the low cost structure of index funds. - Jim Campbell, Ortonville, Mich.

Answer The good news: You have two choices. The bad news: They're expensive and risky. So go in with your eyes open.

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Your options are the PowerShares WilderHill Clean Energy Portfolio exchange-traded fund (PBW (Charts) and the seven-month-old Guinness Atkinson Alternative Energy mutual fund (GAAEX (Charts).

The ETF's expense ratio of 0.71% is high for that type of investment, and the mutual fund's 1.98% is no bargain either. While neither fund invests in, say, ExxonMobil (Charts), they are not 100% green. The Clean Energy fund's biggest holding is Cypress Semiconductor, which gets about 20% of its sales from solar-energy products.

The risk: You're going to own a lot of small stocks in a cutting-edge field where failure will be common. As Internet stock funds taught us a few years ago, you can correctly predict that an industry is poised for explosive growth - and still get burned in the market.

Question: Whose target-date retirement fund for 2035 - T. Rowe Price's, Fidelity's or Vanguard's - would have produced the best results if I had invested in it a year ago? Can I find out from price-history charts online? - Jim Morgan, Renton, Wash.

Answer: No, you can't compare one-year mutual fund returns using those charts. But that's not necessarily a bad thing.

Price charts don't track funds' dividends and capital-gains distributions, so they don't indicate how much you would amass if you reinvested those payouts as most people do.

For that you need total-return stats, which show that a $10,000 investment in T. Rowe Price's 2035 fund would have grown to $11,071 in a recent 12-month period - beating Fidelity's offering by $121 and Vanguard's by $195.

So T. Rowe wins? Not really.

One-year performance is a lousy yardstick, especially for target-retirement funds, which are funds of funds designed to be a one-stop solution for retirement near a specified date perhaps decades away. When Money Magazine has examined target-date funds, we've looked not only for low expense ratios - key to any fund's performance - but also for an age-appropriate mix of stocks and bonds, a prudent dose of global investments and a first-rate group of funds in the portfolio.

That led us to include both the Vanguard and T. Rowe Price target-retirement lineups in the Money 65, our list of recommended funds.

___________________

Looking for some answers? Send us your questions about investing. E-mail answer_guy@moneymail.com.

Past answers: Are stable-value funds a good deal and when to dump a lagging mutual fund.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.