In India, as the push for clean energy grows stronger, green energy mutual funds are becoming a popular way for people to invest in companies that focus on renewable energy like solar, wind, and hydro power. These funds let you put your money into businesses that care about the environment while keeping an eye on potential growth.
If you’re curious about what green energy mutual funds are all about, this article is for you. let’s dive into the world of green energy mutual funds and see what makes these funds tick!
What Are Green Energy Mutual Funds?
Understanding Green Energy Mutual Funds
So, what exactly is a green energy mutual fund? It’s a type of mutual fund that pools money from lots of investors and uses it to buy shares in companies working on renewable energy—think solar panels, wind turbines, or hydroelectric plants.
In simple terms, a green energy mutual fund is like a basket of investments in businesses that help the planet by cutting down on pollution and fossil fuels. In India, these funds are growing fast as the country aims to boost clean energy to 500 gigawatts by 2030, making green energy mutual funds a key part of the investment scene as of March 2025.
How They Differ from Regular Funds
Unlike regular mutual funds that might invest in all kinds of companies—like tech or banks—a green energy mutual fund zeroes in on firms tied to renewable energy and sustainability. While a typical fund spreads money across many industries, a green energy mutual fund sticks to a specific theme: clean energy. This focus sets green energy mutual funds apart, tying them to India’s green goals and global trends toward a cleaner future, giving you a way to support the environment through your investments.
The Investment Process
How does a green energy mutual fund operate? When you invest—say ₹10,000—you join other investors, and a fund manager takes that money to buy stocks in green energy companies. These could be firms making solar panels, building wind farms, or developing clean tech. The value of your investment, called the Net Asset Value (NAV), changes daily based on how those companies’ stocks do. In India, green energy mutual funds focus on businesses driving renewable energy growth, with the fund manager picking stocks to match the fund’s eco-friendly goals as of 2025.
What They Invest In
Green energy mutual fund puts cash into companies that produce or support renewable energy—solar, wind, hydro, or even green hydrogen. Some also include firms making energy-efficient tech or sustainable products.
A green energy mutual fund might hold shares in companies like Tata Power (solar and wind) or Suzlon Energy (wind turbines), depending on the fund’s focus. This targeted approach connects green energy mutual funds to the country’s shift toward cleaner power sources.
Exploring the 7 Best Green Energy Mutual Funds in 2025
Here’s a look at seven notable green energy mutual funds in India for 2025, based on their assets under management (AUM), past returns, and focus on renewable energy. This isn’t about telling you which is best—it’s just a detailed rundown of funds standing out in the green energy space.
1. HDFC Sustainable Development Fund
Fund Overview
The HDFC Sustainable Development Fund is a green energy mutual fund that invests in companies pushing sustainability, with a big chunk in renewable energy like solar and wind. Launched in 2019, it has an AUM of around ₹2,500 crore as of December 2024. Its NAV is about ₹35, reflecting steady growth over time. This green energy mutual fund blends green goals with solid performance.
Key Details
Over the past 3 years, it’s averaged 18% annual returns, with an expense ratio (fee for managing the fund) of 1.5%. It holds stocks in green energy firms alongside other sustainable businesses, making it a strong player in India’s green energy mutual fund market.
2. SBI Sustainable Equity Fund
Fund Overview
The SBI Sustainable Equity Fund is another green energy mutual fund focusing on companies with eco-friendly practices, including wind and hydro energy. Started in 2019, it manages ₹3,000 crore in AUM, with an NAV near ₹40. This green energy mutual fund taps into India’s growing clean energy sector.
Key Details
It’s delivered a 3-year return of 19%, with an expense ratio of 1.6%. The fund invests heavily in renewable energy companies, aligning with the traits of a top green energy mutual fund in 2025.
3. ICICI Prudential Climate Action Fund
Fund Overview
The ICICI Prudential Climate Action Fund, launched in 2021, is a green energy mutual fund targeting firms fighting climate change, especially in solar and renewable energy. Its AUM is ₹1,000 crore, with an NAV around ₹15 as of late 2024. It’s a newer fund but growing fast in the green energy mutual fund space.
Key Details
It has a 2-year return of 12%, with a 2% expense ratio due to active management. This green energy mutual fund focuses on climate solutions, making it a key name in India’s green investment options.
4. Motilal Oswal Nifty Green Energy Index Fund
Fund Overview
The Motilal Oswal Nifty Green Energy Index Fund is a green energy mutual fund that tracks the Nifty Green Energy Index, covering companies in solar, wind, and more. Launched in 2021, it has an AUM of ₹200 crore and an NAV of about ₹12. It’s a passive fund in the green energy mutual fund category.
Key Details
It’s averaged 15% over 2 years, with a low 0.5% expense ratio. This green energy mutual fund mirrors an index of renewable energy stocks, offering a cost-effective way to invest in green energy.
5. Tata Ethical Fund
Fund Overview
The Tata Ethical Fund, started in 2009, isn’t just a green energy mutual fund—it invests in ethical companies, some of which are in renewable energy. With an AUM of ₹1,500 crore and an NAV near ₹300, it’s a long-running fund with green energy ties.
Key Details
It has a 5-year return of 14%, with a 1.8% expense ratio. While not solely a green energy mutual fund, its holdings in clean energy firms make it a notable option in 2025.
6. Nippon India ETF Nifty Green Energy
Fund Overview
The Nippon India ETF Nifty Green Energy is a green energy mutual fund that tracks the same Nifty Green Energy Index, with an AUM of ₹100 crore and an NAV around ₹14 as of late 2024. Launched in 2021, it’s an ETF (exchange-traded fund) in the green energy mutual fund lineup.
Key Details
It’s shown a 2-year return of 16%, with a 0.3% expense ratio—super low for a green energy mutual fund. It invests in renewable energy companies traded on the stock exchange.
7. Axis Focused Fund
Fund Overview
The Axis Focused Fund, launched in 2015, isn’t a pure green energy mutual fund but includes green energy companies like those in hydro power among its select holdings. Its AUM is a massive ₹20,000 crore, with an NAV near ₹50.
Key Details
It averages 20% over 5 years, with a 1.7% expense ratio. This green energy mutual fund blends renewable energy with other sectors, offering broad exposure.
Comparison of Green Energy Mutual Funds
| Fund Name | Launched | AUM (₹ Crore) | Returns (%) | Focus Area |
|---|---|---|---|---|
| HDFC Sustainable Development | 2019 | 2,500 | 18 (3-Year) | Green energy, sustainability |
| SBI Sustainable Equity | 2019 | 3,000 | 19 (3-Year) | Eco-friendly, green energy |
| ICICI Pru Climate Action | 2021 | 1,000 | 12 (2-Year) | Climate solutions, renewables |
| Motilal Oswal Nifty Green Energy | 2021 | 200 | 15 (2-Year) | Green energy index |
| Tata Ethical | 2009 | 1,500 | 14 (5-Year) | Ethical, some green energy |
| Nippon India ETF Nifty Green | 2021 | 100 | 16 (2-Year) | Green energy index |
| Axis Focused | 2015 | 20,000 | 20 (5-Year) | Broad focus, includes green |
Note: Data approximate as of December 2024; check fund websites for updates.
Green energy mutual funds in India, like HDFC Sustainable Development Fund and Nippon India ETF Nifty Green Energy, shine a light on renewable energy investing as of March 2025. With AUMs from ₹100 crore to ₹20,000 crore and returns of 12% to 20%, these seven green energy mutual funds show the variety in this space—some pure green plays, others blending broader goals.
They connect to India’s clean energy push, offering a glimpse into solar, wind, and hydro sectors. This guide lays out their details in simple terms, giving you a clear view of green energy mutual funds without any nudge to jump in!
Disclaimer: This article is for informational purposes only and does not offer investment advice. Fund details may change, so check with fund providers for the latest info. Investing involves risks—research thoroughly before deciding.
