Renewable Energy Funds-SRA Fund Quality Ratings

SRA quality ratings-An Explanation:
Fund quality ratings are evaluated and assigned to funds within their designated investment category/segment. The investment category/segment for which the following ratings have been assigned to mutual funds and ETFs fall into the thematic renewable energy segment, defined as funds that aim to invest in companies across sectors that will drive and benefit from the energy transformation. The segment covers 38 funds/share classes with $4.2 billion in net assets as of May 30, 2025, excluding funds that employ leverage.

Fund quality ratings are expressed along a five-point scale that runs from A (highest quality) to E (lowest quality).

Ratings combine qualitative and quantitative elements and are derived based on an evaluation of the five factors. The first three, which are evaluated qualitatively, are: (a) Management company. The fund should be offered and managed by an established firm with a positive reputation, to ensure effective fund operations and instill trust and confidence in the organization. (b) Years in operation. The fund should be in operation for at least three years and managed pursuant to the same investment strategy—to provide a sufficiently long but not excessively long view against which to evaluate the fund’s operations, strategy, and performance. (c) Fund size. The fund’s total net assets should exceed $30 million—so that it may be managed more efficiently and to provide some protection against the fund’s early liquidation or closure. Some exceptions may apply in the case of funds offered by larger, established firms. The next two factors, which are evaluated quantitatively via a scoring methodology, are: (d) Total returns. The fund’s performance results, achieved by adhering to a relatively consistent investment approach, are evaluated relative to an appropriate securities market index over a one year, three year and five-year intervals, and (e) Expense ratio. The fund’s expense ratio is evaluated relative to other funds in the same investment category/segment.

One evaluated and scored, fund quality ratings are distributed as follows: Top 15%=A, next 20%=B, next 30%=C, next 20%=D and final 15%=E.

NA indicates that a rating has not been assigned to the fund as it employs leverage, it falls outside the renewable energy segment, or it fails to meet one of the minimum requirements.

How to use the ratings?
Funds with quality ratings in category levels “A” and “B” should be considered primary candidates for use in constructing a portfolio consisting entirely or partially of sustainable funds. In the case of thematic funds, such as renewable energy funds, investors should keep in mind that some funds are narrowly focused, for example, funds investing in solar or wind energy, while others are broader based, for example, renewable energy. Fund selections should be consistent with an investor’s financial and sustainability goals and objectives.