Top Performing Green Energy Mutual Funds 2025
Are you looking to power up your portfolio for 2025? If yes, here is your chance to invest in the best Green Energy Mutual Funds that have shown tremendous growth in 2024.
Do you find it hard to believe? Let's talk facts, the top stocks in the power & green energy sector like Waaree Renewable gave 800% returns, Inox Wind Energy offered 500% returns, SJVN with a total of 360% returns and Adani Power skyrocketed to 226% returns will make you think otherwise.
Moreover, with the government of every country making this sector a priority, India has also focused on it in its Budget 2024.
In today's blog, you will get a complete analysis of the power and green energy sector, highlighting investment opportunities including how you can make good money by investing in green energy mutual funds India.
Are you looking to invest Rs.10000 in the best energy mutual funds in India for good returns in 2025? Here is why and where you should invest.
Must Learn: How to Make 1 Crore from SIP of Rupee 5000?
Why Energy Mutual Funds are Trending?
First of all, let us simplify renewable energy, basically, it is derived from natural sources like the sun, wind, hydro, and biomass. So by using these sources of energy, we can power any mechanical or electrical thing. These sources are in nature which never ends and are also safe for the environment.
Due to years of use of non-renewable energy in the world, environmental issues are becoming increasingly worse like global warming and climate change.
Some scientists also say that if we do not reduce our current carbon emissions, the world's average temperature may worsen by more than 4 degrees by 2100. Which will put normal life and the ecosystem in danger.
Thus, top countries like the USA, China, Germany, and Japan are moving rapidly towards sustainability by adopting renewable energy sources. India, which benefits geopolitically from its low demand for petrol and oil imports, is also moving swiftly towards renewable energy.
Apart from this, as digitization is getting worse, we have started using electronic items more. Even transportation is now shifting to electric vehicles. So with this increase, the consumption of power will also increase which is why we need more sustainable energy sources.
Like India's power generation has grown by 8.7% in FY 23 which is the biggest growth in the last 30 years. By 2030, our power consumption will increase from 428 GW to 817 GW, in which the contribution of renewable energy will be more than 50%. 500 GW by 2030. The current renewable energy capacity is only 168 GW.
Therefore, due to these factors, it has become a trending sector and shows scope for many investment opportunities in the long term.
Best Green Energy Mutual Funds In India
To achieve your goal, the first step is to find a fund that invests in companies related to the power and renewable sectors. We have identified some high-quality funds based on four parameters. Firstly, we have selected funds whose current portfolio has the highest allocation in the power and energy sector. Secondly, we have considered funds with a consistent and qualitative portfolio performance. Thirdly, we have taken into account the investing philosophy of the fund. Lastly, we have ensured that the fund is actively managed by experienced fund managers.
Here are 4 energy mutual funds that support the power & green energy sector to start your SIP in 2025:
| Scheme Name | Launch Date | AUM (Cr as of 31.10.24) |
|---|---|---|
| SBI Energy Opportunities Fund | 26.02.2024 | Rs.10,486 |
| Nippon India Power & Infra Fund | 01.05.2004 | Rs.7,554 |
| ICICI Prudential PSU Equity Fund | 09.09.2022 | Rs.2,289 |
| Tata Resources & Energy Fund | 28.12.2015 | Rs.1,047 |
1. SBI Energy Opportunities Fund
It is the first fund built solely on the theme of power and new energy. Although the information about this fund is still pending, it has been selected for two reasons. Firstly, it is the only fund dedicated solely to this theme. Secondly, SBI AMC has a good track record of managing sector and theme funds. As per the available information, this fund will invest in five sectors related to Power and Energy, including low-value chain stocks such as - Oil Value Chain - Exploration, Refinery, Chemicals, and Equipment. Gas Value Chain - City Gas Distribution, LNG Terminals. Power value chain - Coal, Power Generation, Transmission. Power Ancillaries Value Chain - Energy EPC, heavy electrical equipment, and Green Energy value chains like solar, wind, hydrogen, and batteries.
2. Nippon India Power & Infra Fund
It has a mixed portfolio of infrastructure with power and energy. As the government has been investing heavily in infrastructure in the last three budgets, all infra-related stocks are performing well, making this fund an attractive investment opportunity. Approximately 47% of this fund's portfolio is invested in companies in the energy and capital goods sectors. It has generated a 72% return in the last year and is the top-performing fund in the infrastructure category.
3. ICICI Prudential PSU Equity Fund
It has a mix of PSU stocks with power and energy. As most power companies are PSU companies, this fund is an excellent choice for investors who want to benefit from both power PSU and other PSU companies. Almost 46% of this fund's portfolio is invested only in the energy sector, which has given explosive returns in the last year. This fund has generated returns of up to 85% in the last year.
4. Tata Resources & Energy Fund
This fund's portfolio is a mix of natural resource companies in the power and energy sectors. The allocation of the energy sector in this fund is up to 29%, materials will be 26%, metal & mining 18%, and most importantly, the chemical sector, which is currently an undervalued and highly growing sector, is 15%. As a result, investors can benefit from energy and other resource companies' growth. This fund has generated returns of up to 41% in the last year.
Portfolio of 10000 in the Power & Energy Sector
Let's say you want to invest 10-20% of your portfolio in a particular theme. To do this, you would need to invest a certain amount of money, let's call it 10000. But how can you best allocate this investment across various funds?
The first thing to consider is to allocate a major portion of the investment to the theme fund itself. For instance, you could invest Rs. 4000 or 40% of your investment in the SBI Energy Opportunities Fund. This will give you a good exposure to the theme.
Another big theme to consider is infrastructure, which has a promising long-term growth story. Investing Rs. 3000 or 30% in the Nippon India Power & Infra Fund can help you take advantage of this trend.
Finally, you can invest the remaining 15% or Rs. 1500 each in the ICICI Pru PSU Equity Fund and the Tata Resources & Energy Fund. This will help you diversify your money productively in related sectors.
By following this approach, you can create a comprehensive portfolio that allows you to fully take advantage of the growing trend of energy mutual funds while also managing risk through diversification.
Who Should Invest & Risk Factors of Best Energy Mutual Funds India?
It's important to note that investing in this strategy comes with risks. The first investment has a higher risk than the second, so it's important to do thorough research and plan your entry and exit points carefully before investing.
This theme has shown a long growth story and is still in its early stages, but it may undergo correction during a market fall. Therefore, only high-risk taker investors should consider this investment. If you have proper financial planning and a financial backup, you can tolerate negative returns during tough times without redeeming the investment. This will increase your chances of success and generate high returns quickly.
To sum up, we've analyzed an exciting growing theme, top funds, and given an example of how to build a Rs.10000 portfolio on this theme.
Conclusion
In short, you get the opportunity to invest in the best energy Mutual Funds India in 2025. Moreover, there is a lot of room for development and risk when investing in the power and renewable energy sectors. It is important to be aware of these dangers and to invest only when you can handle market volatility.
In any case, if you want to reduce the market risk, investing via SIP (systematic investment plan) is the smart choice.
Also to note, exposure to this industry is offered by mutual funds such as Tata Resources & Energy Fund, ICICI Prudential PSU Equity Fund, Nippon India Power & Infra Fund, and SBI Energy Opportunities Fund. If you are willing to make long-term gains by not shying away from little risk, these best renewable energy mutual funds offer interesting opportunities in 2025 for a smart investor like you.
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