Steady on track: green funds continue to move forward | 16/07/22

The comeback of oil and coal has some doubting green investment strategies. With these portfolios it is unfounded. By Julia Gross €uro Sunday.

DThe sustained rise in energy stocks is unsettling some investors who have opted for sustainable investments. Greenwashing claims, such as those recently made by DWS, fuel scepticism. And now the EU Parliament has also agreed to classify investments in natural gas and nuclear power as sustainable under certain conditions – a view not shared by many investors.

In such phases of uncertainty, it pays to focus on the long-term development. The fact is: Companies that are sustainable and contribute to environmental and climate protection have rarely had a better starting position for their business than they currently have. The orientation is politically desired and will be generously promoted in certain segments in the coming years. The investment environment also attaches great importance to such companies, and their commitment is rewarded.

In terms of performance, good sustainability funds do not need to hide, whether they focus on the ecology and environmental protection sector or apply strict sustainability standards to broadly diversified equity investments. While this does not currently protect them from losses, it shows that investors can do well over the long term even with the limited investment universe.

Orientation when choosing a fund

When looking for funds with a good risk-return ratio and a portfolio that is sustainable, especially with regard to environmental and climate issues, Finanz Verlag’s fund ratings offer guidance. The FondsNoten, which we calculate monthly together with the analysis company FondsConsult, looks at returns and value fluctuations on a portfolio over four years, always in comparison with funds from the same investment category. There are also qualitative criteria such as management continuity.

The environmental assessment, on the other hand, assesses the concrete investments in a share fund’s portfolio according to ten environmental, social and climate protection criteria. There are more points for companies with an environmental orientation or activities within renewable energy, as well as for low CO2– Emissions. The rating decreases when investing in companies that conduct their business with fossil fuels, nuclear power or weapons. If the fund contains shares from companies that are on the Norwegian sovereign wealth fund’s exclusion list due to coal mining or coal-fired electricity production, the portfolio automatically receives the worst eco-rating “E”. Mountain-View Data recalculates the eco-rating of Finanz Verlag every quarter.

Repeat offenders at the top

From the current evaluation of Eco-Ratings, we present the best results from the categories global equity funds and global equity funds ecology in the table. Portfolios that have been on the market for less than 12 months or have a volume of less than DKK 20 million. EUR, was not taken into account.

All the top funds mentioned are “repeat offenders”, which means that they have already achieved the grade “A” in previous eco-rating evaluations. This speaks for consistency in the investment strategy. In particular, Erste Stock Environment and Green Effects NAI-Werte Fonds have drawn attention to themselves for some time thanks to their good performance and consistent “A” ratings.

Of First floor environment the Austrian Erste Asset Management is a so-called feeder fund for the Erste WWF Stock Environment, which German investors can no longer invest directly in. But it doesn’t matter, the fees are identical at 1.80 percent and so is the portfolio in the end. The Austrians rely heavily on renewable energy and energy efficiency (in total almost 60 percent in the portfolio). The two American solar companies Sunrun and Sunnova are the most heavily weighted. Investors focusing on renewable energy must be able to withstand large fluctuations. Since the beginning of the year, Aktiemiljoet has fallen by 18 percent.

Behind GreenEffects NAI Value Fund There is an unusual construction here: You can only bet on the 30 shares included in the natural share index in the Securvita health insurance fund. They are industrial pioneers who “contribute to ecologically and socially sustainable solutions to key human problems”. Extensive exclusion criteria apply; In 2021, for example, four companies were exchanged. The health insurance company Molina, the medical technology group Smith & Nephew and the infrastructure specialist Acciona are currently valued the most. Fees are low at 1.12 percent and volatility is below average.

structural growth

that Head first-Portfolios score in the Eco-Rating with the exclusion of arms manufacturing as well as coal and nuclear energy. The strategy, which focuses on structurally growing topics, also helps with the evaluation. example digitization: Companies often have a low CO here2emissions and make positive contributions to environmental protection, for example by making processes more efficient. Unlike Unconstrained, Global Equities works with hedging strategies.

With Faro’s listed fixed assets a real estate and infrastructure equity fund that was only launched in 2020 (see also page 20) also came out on top. Also still young Heptagon future trends is dependent on long-term trending topics.

Image source: BÖRSE ONLINE

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