Other funds have followed similar paths. One year ago, F&C Global Climate Opportunities Fund had 9 percent of its holdings in wind and solar stocks. Now, the London-based fund has just 1 percent in solar, zero in wind. Most of the fund's alternative-energy investments are in natural gas, which critics argue is no "alternative" because it's a fossil fuel whose emissions exacerbate global warming.
"It's difficult to [imagine] governments funding subsidies for wind and solar when they have high unemployment and are really reluctant to increase electricity prices," Mr. Mercado says. "But gas is a nice little area within alternative energy. It's currently cheap; it's a cleaner source of fuel; and it's sort of a stopgap, transitional area for energy."