Get in the Game: Mutual Funds

If the thought of directing your own individual stock trades is intimidating, experts suggest you start out by buying shares in a mutual fund, a pool of money collected from a group of investors and managed by a financial expert. Following a fund-specific set of investment criteria, the expert, or fund manager, uses the cash to invest in a range of stocks, bonds, or other assets. "With a mutual fund, you get automatic diversity—you're able to acquire stakes in numerous companies at once," says Matthew Patsky, a portfolio manager at the Boston-based Winslow Green Growth Fund. While stockbrokers charge just about every time you buy or sell shares, mutual-fund companies collect one annual fee that covers all fund-operating expenses. Called an expense ratio, the fee is a percentage of your average net holdings for the year. The funds featured here invest in companies that practice sustainability or carbon neutrality or focus on developing alternative-energy technologies. Most have consistently outperformed the S&P 500 Index average over the past five years.

SMART PICKS: MUTUAL FUNDS
1. Calvert Large Cap Growth Fund (clgax) Focus: Eco-savvy large-caps ($10 billion and up) Typical stock: Goldman Sachs, which promotes mandatory pollution reductions Five-year average annual return: 4.88% Minimum initial investment: $2,000 Expense ratio: 1.56%, with a one-time upfront fee of 4.75% of initial investment Net assets: $1.15 billion. calvert.com

2. New Alternatives Fund (NALFX) Focus: Foreign and domestic alternative-energy companies Typical stock: German solar-panel maker Conenergy Five-year return: 5.75% Minimum initial investment: $2,500 Expense ratio: 1.17% Net assets: $95 million. newalternativesfund.com

3. Portfolio 21 (PORTX) Focus: Small-cap clean-techs and large-cap companies with sustainability programs Typical stock: Swiss Re, a corporate leader in global-warming awareness Five-year return: 7.2% Minimum initial investment: $5,000 Expense ratio: 1.5% Net assets: $130 million. portfolio21.com

4. PowerShares WilderHill Clean Energy Portfolio (PBW) Focus: Small-cap clean-techs; holdings are identical to those on the WilderHill Clean Energy Index Typical stock: Canadian fuel-cell manufacturer Ballard Power Systems Return since March 2005 inception: 16.04% Minimum initial investment: $50 Expense ratio: 0.7% Net assets: $664 million. powershares.com

5. Winslow Green Growth Fund (WGGFX) Focus: Clean-tech and eco-savvy small- cap companies Typical stock: Zoltek, of St. Louis, a supplier of carbon fiber for wind turbines Five-year return: 8.2% Minimum initial investment: $5,000 Expense ratio: 1.45% Net assets: $290 million. winslowgreen.com