Fund for renewable energiesWhich fund fits which strategy

Time to read9 min.

updated at06/10/2026

CategoryRenewable energy investments

Aerial view of solar cell fields on green grass.

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The most important facts at a glance

Renewable energy funds pool the capital of many investors and invest it in the generation of electricity from wind and solar, either directly in real assets or indirectly via equities in the industry.
The most important choice is between direct and indirect investment. Only direct investment via a tangible asset fund is decoupled from the stock market, while indirect investment via ETFs or equity funds remains an investment with a stock market profile.
When selecting funds, the strategy first determines which fund type comes into question and then the quality of which specific fund within this type is convincing.
The strategic decision is made between a concentrated investment in a few projects (usually a closed-end fund) and a broadly diversified component that stabilises the custody account (usually an ELTIF).
Important criteria include the breadth and future viability of the portfolio, experience in asset management, track record, capital commitment and costs.
A broadly diversified ELTIF with experienced asset management combines the characteristics that make a tangible asset investment in renewable energies stable and future-proof.

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What are renewable energy funds?

They bundle the capital of many investors and invest it in the generation of renewable energy. Either the money flows directly into tangible assets such as wind and solar farmsin which the fund is involved. Or it flows indirectly into securities, i.e. shares and bonds of companies active in the renewable energy sector. Broader funds also take into account complementary infrastructure such as electricity grids and battery storage systems, which are necessary for a functioning energy system and also have yield potential, in addition to pure generation.

The distinction between direct and indirect investment is the most important direction for this asset class. It determines how a fund operates, the risks it bears and how closely it is linked to stock market fluctuations.

Incorrectly, renewable energy funds are often equated with sustainable funds in general or referred to as climate funds. A sustainable fund distributes its capital across many sectors and usually follows broad ESG criteria. A climate fund is aligned with the objective of reducing emissions, but can also invest in industry, real estate or transport for this purpose. A Renewable Energy Fund is narrower and specifically aims to generate electricity and heat from renewable sources.

What types of renewable energy funds are there?

They can basically be divided into two groups: those that invest indirectly through securities and those that invest directly in real assets such as wind and solar farms. On the other hand, the older classification into open-ended and closed-ended funds has lost significance since the ELTIF introduced a semi-liquid structure that cannot be clearly assigned to either category.

Within these two groups, four fund types have established themselves on the market:

Equity and thematic ETFs: indirect investment, traded on a daily basis, low costs. But no “real” investment in renewable energies, as there is no tangible value reference
Actively managed thematic funds: indirect investment, active selection of securities by a fund management company, with higher costs and depending on fluctuations on the stock market
ELTIFs: direct participation in the real tangible asset, with high diversification potential. Since the ELTIF 2.0 reform, the high minimum investment amounts have usually been eliminated
Closed-end funds and crowdinvesting: Direct involvement in individual projects, but with high concentration risk

Comparison of renewable energy funds

Fondsart	Stärken	Zu beachten
Aktien- und Themen-ETF	börsentäglich handelbar, niedrige Kosten	kein direkter Sachwertbezug, voll den Börsenschwankungen ausgesetzt
Aktiv gemanagter Themenfonds	aktive Auswahl und Steuerung durch ein Fondsmanagement	höhere Kosten, ebenfalls an die Börse gebunden
ELTIF	direkte Beteiligung am Sachwert, Diversifikationspotenzial	Liquidität je nach Fonds sehr unterschiedlich, Fondsinhalt vor dem Kauf prüfen
Geschlossene Fonds und Crowdinvesting	direkter Bezug zu einem konkreten Projekt	hohes Konzentrationsrisiko, bis zum Totalverlust

Fondsart	Aktien- und Themen-ETF
Stärken	börsentäglich handelbar, niedrige Kosten
Zu beachten	kein direkter Sachwertbezug, voll den Börsenschwankungen ausgesetzt

Fondsart	Aktiv gemanagter Themenfonds
Stärken	aktive Auswahl und Steuerung durch ein Fondsmanagement
Zu beachten	höhere Kosten, ebenfalls an die Börse gebunden

Fondsart	ELTIF
Stärken	direkte Beteiligung am Sachwert, Diversifikationspotenzial
Zu beachten	Liquidität je nach Fonds sehr unterschiedlich, Fondsinhalt vor dem Kauf prüfen

Fondsart	Geschlossene Fonds und Crowdinvesting
Stärken	direkter Bezug zu einem konkreten Projekt
Zu beachten	hohes Konzentrationsrisiko, bis zum Totalverlust

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Indirect investment: Equity and thematic ETFs

A renewable energy ETF tracks an equity index that bundles companies from the industry, such as manufacturers of wind turbines or operators of solar parks. Shares can be traded on trading days and are available for small amounts.

The benefit lies in this flexibility and the low costs, as an ETF is not actively managed. The disadvantage is the composition. Investors do not acquire a holding in an individual investment if the price of company shares also depends on stock market sentiment and interest rate levels. In addition, many indices also list utilities that have only converted part of their business under the label of renewable energies.

Indirect investment: Actively managed thematic funds

Actively managed thematic funds also invest in shares of companies from the renewable energy sector. Unlike with an ETF, this is where fund management makes the selection of securities.

This active selection usually makes the investment focus more transparent because the fund management clearly justifies which companies it invests in. However, it comes at a price: Active management incurs higher costs than with an ETF. This type of fund does not change the fundamental dependence on the stock market, as the investment remains subject to fluctuations.

Direct investment: ELTIFs

An ELTIF (European Long-Term Investment Fund) is a comparatively young fund structure through which private investors can directly invest in tangible assets. The capital flows into real assets such as wind and solar farms, which continuously produce electricity and generate cash flows from it.

ELTIFs have significantly changed the market, even though they have not yet arrived in all custody accounts. For a long time, direct access to tangible investments in renewable energies was reserved for institutional investors, while it remained blocked for private investors. The ELTIF has broken this, which is why the industry is talking about a “democratisation of the private markets”. Only through this structure can private investors seriously add renewable energies as tangible assets to their custody account and thus diversify more broadly.

One disadvantage is the limited availability. ELTIFs are semi-liquid and only redeem units in fixed time windows, the maturities of which vary between one and several years depending on the fund. The capital is thus tied up in the long term. In addition, very different funds are marketed under the term ELTIF, from the broad infrastructure portfolio to structures with a focus on private debt. The name of the ELTIF alone does not tell you exactly what the fund is all about.

Direct investment: Closed-end funds and crowdinvesting

Closed-end funds and crowdinvestment projects involve direct participation in renewable energy production facilities, usually in one or a few projects.

This makes the investment particularly tangible, because the capital flows into a clearly named project, such as a specific solar park. Crowdinvesting also involves low entry fees, often starting from 100 or 500 euros.

However, it is precisely this concentration on a few projects that is the weakness of this form of investment. If a single project fails, it cannot be made up for it, unlike a decline in the stock market. In addition to crowdinvesting, investors usually give their capital as subordinated loans: In the event of insolvency, they are only served after all other creditors, which can lead to the total loss of the investment sum. The capital is also tied up over the entire term.

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Renewable energy funds: The four types in comparison

Fondsart	Sachwertbezug	Streuung
Aktien- & Themen-ETF	indirekt (über Aktien)	breit gestreut
Aktiver Themenfonds	indirekt (über Aktien)	breit gestreut
ELTIF	direkt (über reale Anlagen)	konzentriert gestreut
Geschlossener Fonds / Crowdinvesting	direkt (über reale Anlagen)	konzentriert gestreut

Fondsart	Aktien- & Themen-ETF
Sachwertbezug	indirekt (über Aktien)
Streuung	breit gestreut

Fondsart	Aktiver Themenfonds
Sachwertbezug	indirekt (über Aktien)
Streuung	breit gestreut

Fondsart	ELTIF
Sachwertbezug	direkt (über reale Anlagen)
Streuung	konzentriert gestreut

Fondsart	Geschlossener Fonds / Crowdinvesting
Sachwertbezug	direkt (über reale Anlagen)
Streuung	konzentriert gestreut

Renewable energy funds: opportunities and risks

Reasonably diversified funds for renewable energies distribute the capital invested across many investments, thereby reducing the weight that an individual investment would have in the portfolio. Own risks arise from the fund structure itself, such as costs and limited availability of capital.

What are the benefits of renewable energy funds?

Future-proof asset class: Renewable energies now account for more than half of German electricity generation, the demand for electricity continues to increase and its expansion is politically planned for the long term.
New module in the custody account: Renewable energies are hardly represented in many portfolios to date. As their own asset class, which behaves differently from equities or bonds, they supplement a custody account with a component that is usually still missing there.
Risk diversification: A fund allocates capital to many investments rather than a single one. If the yield of an asset is lower, for example due to a weak wind year or the failure of a project, this weighs less heavily on the overall portfolio.
Access with manageable amounts: It is hard to build an entire portfolio of wind and solar power plants on its own. A fund makes this access possible, and this already with sums that are achievable for private investors.
Regulated framework: Funds are subject to fixed legal requirements, from the prospectus obligation to the standardised information sheet. Private direct participation in a single project does not provide this regulated framework.
Selection and review by the fund management: In the case of actively managed funds, fund management decides which investments and projects are included in the portfolio. Investors do not have to filter out the viable project themselves from a confusing selection.

What are the risks of renewable energy funds?

Some of the renewable energy funds do not invest in the assets themselves, but in equities of companies in the sector. This applies to ETFs and actively managed thematic funds. Anyone investing here primarily bears the risks of the equity market: The value depends on stock market sentiment, valuation level and interest rate expectations, not on the electricity yield of a specific wind or solar farm.

How pronounced this is can be seen by looking at the performance. Clean energy equity funds went through several weak years and recovered significantly in 2025.¹ These are fluctuations, as you know them from equities, and they have nothing to do with how much electricity the underlying assets actually generated. Anyone who wants to bring renewable energies into the custody account because of their own profile, which is independent of the stock market, cannot achieve this profile via indirect investment. It remains an equity investment - with all the opportunities and risks of the equity market, without exploiting the strengths of a real investment in tangible assets.

The following risks relate to direct investment in real generating assets:

Electricity price risk: A growing part of electricity revenue depends on spot market prices, which fluctuate hourly. If many plants produce at the same time, prices fall, which is known as the cannibalisation effect. Long-term power purchase agreements and storage solutions can mitigate this.
Weather and climate risk: Production from wind and sun is naturally weather-dependent, and the variations become greater. A strong year can be followed by a weak one and, in the long term, climate change shifts both wind patterns and solar radiation. A good location therefore does not necessarily remain good in the long term. Without geographical diversification, the investment is delivered to natural phenomena.
Refinancing and interest rate risk: Plants for the generation of renewable energy are capital-intensive and are largely financed via loans. Rising interest rates are making new projects more expensive and making it more difficult to refinance existing systems.
Concentration risk: Not every fund is broadly positioned. If a large part of the assets are allocated to a few investments, the loss in value of an individual position will affect the entire fund more. How well thought-out a fund is in this respect also depends on the experience of asset management.
Liquidity risk: Wind and solar farms cannot be sold overnight. Funds in this asset class therefore operate with minimum holding periods and fixed redemption windows. These mechanisms protect the portfolio from emergency sales under time pressure. For investors, the capital is thus tied up over several years, short-term exits are usually difficult to make. For some fund types, such as closed-end funds, the capital is even tied up over the entire term.

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How has the market for renewable energy funds developed?

Access for private investors has opened up significantly in recent years and the selection of funds has increased noticeably. When it comes to dealing with sustainability promises, the environment has also become more sober and stricter in response to a wave of greenwashing accusations. In addition, the first pure tangible asset funds can now demonstrate a multi-year track record that shows their performance over different market phases.

For a long time, direct participation in wind and solar farms was reserved for institutional investors, while private investors only remained the indirect route via equities and ETFs.

This has changed with the launch of the ELTIF in 2015. The ELTIF 2.0 reform, applicable since 2024, has once again opened up direct access to tangible assets of the energy transition to a wider audience. Among other things, the legally prescribed minimum investment of 10,000 euros has been omitted. The effect can be seen in the number of products: In 2025 alone, 113 new ELTIFs were launched across Europe, almost twice as many as the previous year. Assets under management increased to around 34 billion euros by the end of 2025, well over 55 percent above the previous year’s figure.

ELTIFs can hold various assets, but in Germany the capital flows mainly into infrastructure. Of the 4.4 billion euros that German investors held in ELTIFs at the end of 2025, around 60 percent were attributable to infrastructure funds in the form of an ELTIF, which also includes investments for renewable energies.

At the same time, the view of green investments has changed. In the years of the ESG boom, a fund name with terms such as “green” or “sustainable” was a selling point and the portfolio did not always cover what the name promised. Meanwhile, ESMA guidelines require that a fund can also demonstrate a sustainability concept in its name through its investments.² Sustainable funds also recorded net outflows in 2025 for the first time in years.³

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What is important when selecting a renewable energy fund?

First, the strategy decides which fund type is suitable and then the quality of which specific fund within this type is convincing. Seven questions lead through both steps:

Direct or indirect investment: Should the capital flow into real wind and solar farms whose electricity revenue bears the value? Or in shares of companies in the sector whose price follows the stock market?
Role in custody account: Should the fund be a concentrated investment in a few projects or a broadly diversified component that stabilises the custody account?
Ingredients: What does the fund actually contain? Can this be verified using the key information document and investment conditions?
Portfolio breadth and future viability: How widely is the fund spread across locations and technologies? Does it think about complementary infrastructure such as storage and networks? How does he market his electricity?
Asset Management & Track Record: How much tangible value expertise is behind the selection and operation of the systems? Can the performance be seen over several years and different market phases, or is it only prospective? Can the provider demonstrate other successful tangible asset funds?
Liquidity and investment horizon: Does the fund’s capital commitment match the period over which the money is not needed?
Expenditure: What ongoing costs are incurred and are they proportionate to the performance of the fund type?

The first question separates indirect investment via ETFs and thematic funds from direct investment. The second question then decides within the direct investment between ELTIF and Closed-Ended Fund. The remaining five questions check whether a specific fund holds what its type promises.

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1. Direct or indirect investment? Stock exchange vs. tangible assets

Tangible assets such as renewable energies unleash their actual potential when they are released from the stock market. It is precisely this benefit that disappears as soon as the investment is made indirectly via an ETF or an equity fund.

Anyone who chooses the convenient way via an ETF gets the industry, but not the tangible asset. Such a fund can then no longer be evaluated on the basis of the investments and their electricity revenues, but rather on the basis of the usual stock market indicators such as performance and range of fluctuations. Measured by these key figures, it then competes with any other ETF - even those that have nothing to do with renewable energies. The rest is an equity investment among many, which also follows more typical stock market guides and wisdoms for selection.

However, there is no way around direct investment for a real contribution to the energy transition and a custody account that is to become more independent of the stock market.

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2. Role in the custody account: Return driver or stabiliser?

The second question concerns the strategic role that the investment in the custody account should play: An opportune but also risky individual position? Or should renewable energies stabilise the custody account and make it more predictable? This makes the right fund type virtually self-evident.

A closed-end fund invests capital in a few investments, sometimes in a single investment. If the project goes up, the return can be high. However, these few plants must deliver reliably over many years in order for it to work. And that’s exactly the crux, because the market is becoming increasingly demanding.

Whether an individual site is getting enough wind or sun on a permanent basis, whether the selected technology is robustly ageing, whether the revenue model is bearing over the entire term, whether a new building is completed according to plan - all of this can hardly be assessed seriously from the outside for most private investors. In addition, the yields have fluctuated more since the end of the fixed feed-in tariff. In hours of high feed-in, the price of electricity on the market can even fall below zero.

ELTIFs tend to go the other way. The capital is distributed across many assets at different locations and, in some cases, beyond pure generation, also to complementary infrastructure such as battery storage and electricity grids, which make the fund’s cash flows more predictable. This diversification cushions the risks of the asset class rather than pooling them on a few investments.

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3. Fund content: What does it really mean?

How easy it is to answer this depends on the fund type. A closed-end fund has an advantage here: It invests in one or a few clearly named projects. Investors know which solar park and location their capital flows into.

In the case of ELTIFs, the review starts a step earlier, because ELTIFs are a fund shell, not a statement about the content. This structure can be used to invest in renewable energies, but also in other areas, from real estate to corporate loans. The first question for a specific ELTIF is therefore simply whether it invests in renewable energy generation plants at all and not in something entirely different.

However, this clarity of content requires that the Fund provides the necessary information at all. How openly a provider presents its portfolio composition is therefore already a selection criterion. The fund’s website often already gives an initial impression: Can you recognise real, concrete plants with names and locations, perhaps even with photos of the wind and solar farms? Or are there abstract descriptions that are hard to grasp behind the individual systems?

The binding information can be found in the key information document and in the investment conditions, supplemented by ongoing reports on the individual investments for transparent providers. Where such information is missing or remains vague, this is a warning signal in itself.

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4. Broadness and future viability: How well is the portfolio positioned?

The obvious first: A portfolio should be broadly diversified. But breadth is more than just the number of facilities, as five parks in a region share the same weather and one wind hits them together. Robust diversification is only achieved when the portfolio is spread across several countries and weather regions, mixes solar power with wind energy and also includes assets beyond generation.

After all, what distinguishes a good portfolio from a solid one is looking ahead. Pure wind and solar farms are already reaching their limits today and a growing part of value creation and risk management is shifting from generation to infrastructure. Battery storage and electricity grids should also find their place in future-proof funds.

Once this is done, the decisive step comes: How modern and powerful are the systems and their infrastructure actually? And what happens on the acceptance side? Is the electricity hedged via long-term purchase agreements with large customers and combined with other marketing channels? An investment whose returns depend solely on the spot market price is on a wobbly ground, as this price falls when many investments deliver at the same time.

A closed-end fund cannot keep up with these benchmarks on a broad scale, as its few investments can hardly be spread across regions and technologies. It is more difficult, however, that it commits itself to these investments for the entire term and uses them to calculate its target return. But in a market that is changing rapidly in terms of technology and its marketing channels, a selection that seems first-class today may be outdated in ten years. At a time of guaranteed feed-in tariffs, the revenues could be planned halfway. However, this phase is over and high return promises are therefore on a more uncertain foundation.

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5. Asset management and track record: Who is behind the fund?

With a tangible investment, you ultimately entrust your money to real people who select, buy and operate real wind and solar farms for years. Unlike an index fund that follows a formula, the result here depends on experience and judgement. That is why it is not a formality to stand behind a fund, but rather a selection criterion of its own. Three levels are worth looking at:

The fund management: What competencies do the people who act have? Are they representing the fund with their face and name? A management that communicates openly and justifies its decisions in a comprehensible way creates a different basis for trust than an anonymous one.
The supplier: Does the company behind it have real tangible expertise or is it above all trying to follow a trend? One clue is the history. How long has the provider been active in tangible assets and renewable energies? As the market grows, many new providers are also entering this asset class without extensive experience. After all, financial expertise is not enough to be successful here: Technology and market understanding are equal.
The track record: Can the fund look back on real results over several years? The past years, with their crises and jumps in interest rates, have provided enough ups and downs to see how a product actually performs. For young funds without their own history or closed constructs, it is advisable to look at the performance of other funds of this provider.

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6. Liquidity and investment horizon: Does the capital commitment fit your own time horizon?

How long the capital is tied up clearly differs between the two types of funds, and it is the question that most likely depends on your own life planning:

A closed-end fund binds capital over the entire term. There is usually no plan to exit before that, the money is firmly invested over many years.
An ELTIF is semi-liquid. This means that it is possible to exit before the end of the term, but not on a trading day, but on fixed redemption dates and under certain conditions.

The extent to which this tie-in is close or extensive varies greatly from fund to fund. The range ranges from multi-year minimum holding periods to funds that allow redemption without a long lead time. ELTIFs are not a uniform liquidity promise, but rather a framework that each fund management company fulfils differently.

This is an opportunity for selection. Instead of looking for the highest possible availability, it’s about finding the right one. The decisive factor is an honest comparison with one’s own time horizon: Over what period of time is the capital really redundant?

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7. Costs: Is the price in proportion to the performance?

In the case of an investment in tangible assets, the running costs pay for a real benefit. A fund that selects, operates and markets real wind and solar farms has a different burden than a product that only tracks an index. Quality in management comes at a price and the lowest price is therefore not a sensible selection target. A strikingly cheap fund may save on asset management, which determines the result.

Nevertheless, it is worth looking at the costs. It makes the decisionif two funds hardly differ according to all other criteria. It can also be a warning signal if a fund is significantly above the usual market conditions without showing any noticeable additional performance. Costs are rarely the first criterion, but a useful last one.

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¹Morningstar: Sind Aktien aus erneuerbaren Energien 2026 ein Kauf? 27.01.2026. https://global.morningstar.com/de/nachhaltiges-investieren/sind-aktien-aus-erneuerbaren-energien-2026-ein-kauf

²BaFin: ESMA-Leitlinien zu Fondsnamen. 25.07.2024. https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Aufsichtsmitteilung/2024/aufsichtsmitteilung_24072024_ESMA_Leitlinien_Fondsnamen.html

³Morningstar: ESG-Fonds verzeichnen 2025 weltweit weitere Abflüsse inmitten anhaltender Gegenwinde. https://global.morningstar.com/de/nachhaltiges-investieren/esg-fonds-2025-endet-mit-weiteren-abflssen-weltweit-inmitten-anhaltender-gegenwinde

Fund for renewable energiesWhich fund fits which strategy

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The most important facts at a glance

Contents

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What are renewable energy funds?

What types of renewable energy funds are there?

Comparison of renewable energy funds

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Indirect investment: Equity and thematic ETFs

Indirect investment: Actively managed thematic funds

Direct investment: ELTIFs

Direct investment: Closed-end funds and crowdinvesting

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Renewable energy funds: The four types in comparison

Renewable energy funds: opportunities and risks

What are the benefits of renewable energy funds?

What are the risks of renewable energy funds?

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How has the market for renewable energy funds developed?

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What is important when selecting a renewable energy fund?

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1. Direct or indirect investment? Stock exchange vs. tangible assets

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2. Role in the custody account: Return driver or stabiliser?

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3. Fund content: What does it really mean?

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4. Broadness and future viability: How well is the portfolio positioned?

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5. Asset management and track record: Who is behind the fund?

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6. Liquidity and investment horizon: Does the capital commitment fit your own time horizon?

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7. Costs: Is the price in proportion to the performance?

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Fund for renewable energiesWhich fund fits which strategy

Contents

Comparison of renewable energy funds

Indirect investment: Equity and thematic ETFs

Indirect investment: Actively managed thematic funds

Direct investment: ELTIFs

Direct investment: Closed-end funds and crowdinvesting

Renewable energy funds: opportunities and risks

What are the benefits of renewable energy funds?

What are the risks of renewable energy funds?

How has the market for renewable energy funds developed?

What is important when selecting a renewable energy fund?

1. Direct or indirect investment? Stock exchange vs. tangible assets

2. Role in the custody account: Return driver or stabiliser?

3. Fund content: What does it really mean?

4. Broadness and future viability: How well is the portfolio positioned?

5. Asset management and track record: Who is behind the fund?

6. Liquidity and investment horizon: Does the capital commitment fit your own time horizon?

7. Costs: Is the price in proportion to the performance?

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