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 October 30 2006: 6:12 PM EST (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. More from Money Magazine Will your hometown be a boomtown again? When marriage means medical bills 5 reasons banks don't get it Best Places to Live Current Issue Subscribe to Money Mutual Fund Screener Domestic Stock Funds Select to Activate Large Growth Large Blend Large Value Mid-Cap Growth Mid-Cap Blend Mid-Cap Value Small Growth Small Blend Small Value Bear Market Search the full range of fund types Return of at Least: Any 3% 5% 7% 10% 15% 20% Over the Past: All 1 Year 3 Years 5 Years 10 Years Expense ratio less than: Category Average 2% 1.5% 1% .5% More Tools Millionaire calculator Rate of return calculator Asset Allocator

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.

25 rules to grow rich by