The best ways to buy into green energy

The EU, China, the US and Japan are all raising investment in renewable energy. That makes buying into the sector tempting. Here, James McKeigue picks two funds that will give you exposure to a range of 'green' stocks.

The 2009 Copenhagen climate conference failed to establish a successor deal to the Kyoto Protocol climate change treaty. However, the European Union, China, the US and Japan are still raising investment in renewable energy. And with 'green' issues forming a major part of Britain's new coalition government manifesto, investors might be tempted to look at buying into the sector.

The problem with investing directly in renewable energy stocks is that while their technologies often work, they're not always commercially viable. Renewable energy often depends on subsidies or feed-in tariffs that put individual firms at the mercy of the regulators in their key markets. Firms are also exposed to the risk of emerging technologies rendering their product obsolete. So this is a sector where funds can be a good way to get exposure to a range of stocks without having to do all the due diligence yourself.

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James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.