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Chart of the Week – April 22, 2024

Chart of the Week – April 22, 2024

The Bottom Line: Returns from sustainable and conventional bond funds have been disappointing, but investing opportunities are available and improvements may come later this year.

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Green bond funds update-April 2023

The Bottom Line: April 2023 green bond fund performance results favored passively managed funds investing in US dollar denominated securities and featuring low expense ratios.

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Top 10 Performing Funds March 2024
Fund Name (MF/ETF) 1-M
(%)
12-M
(%)
iPath® Global Carbon ETN11.34-33.99
Victory Global Energy Transition Y11.02-2.93
VanEck Green Metals ETF10.83-13.42
iPath® Series B Carbon ETN10.73-32.93
KraneShares European Carb Allw Stgy ETF10.73-33.81
Macquarie Energy Transition ETF9.94
AQR Sustainable Long-Short Eq Cbn Awr I7.7438.07
GMO Resource Transition VI7.52-17.81
TCW Transform Systems ETF7.2538.41
Delaware Climate Solutions Y7.13-3.89
Best performing share classes only.
Source: Morningstar Direct.
Chart of the Week – April 22, 2024

Chart of the Week – April 22, 2024

The Bottom Line: Returns from sustainable and conventional bond funds have been disappointing, but investing opportunities are available and improvements may come later this year.

Chart of the Week – April 15, 2024

Chart of the Week – April 15, 2024

The Bottom Line: Natural Resources funds, one of 75 fund categories, posted the fifth best average return in March, but results vary by fund mandate.

Chart of the Week – April 8, 2024

Chart of the Week – April 8, 2024

The Bottom Line:Funds with the highest volatilities are typically, but not always, thematic concentrated funds that expose investors to near-to-intermediate term volatility or risks.

Chart of the Week – April 1, 2024

Chart of the Week – April 1, 2024

The Bottom Line: Only two sustainable fund investing options were launched in March 2024, reflecting a cooling off in sustainable mutual fund and ETF introductions.

Sustainable Funds Monitor

A timely monthly snapshot of trends and developments in the sustainable investing market segment as seen through the lens of mutual funds and ETFs. The Monitor tracks total net assets trends, new fund launches and fund closures, sustainable bond issuances and the performance results of selected sustainable indices versus conventional benchmarks. Published monthly, the Sustainable Funds Monitor is usually available within ten days following the month’s end.

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Sustainable Investing Monitor-April 1, 2024

The Bottom Line:  Sustainable funds gave up assets in March while green bonds flourished. Relative performance results lagged, and fund launches continue to cool off.

ESG in Fixed Income: Crane Bond Fund Symposium, Philadelphia, PA, March 24 -25, 2024

The Bottom Line: At the Crane Bond Fund Symposium last week, five observations and conclusions were offered regarding the current state of sustainable investing in fixed income.

Core questions to ask financial advisors during an interview

The Bottom Line:  Investors seeking to hire a financial advisor should interview multiple advisors before deciding and prepare a set of core questions in advance.

Mirova Global Green Bond Fund (MGGAX) - New ESG Product Profile

Assessment Low Conviction   Synopsis Through its subsidiary, Mirova Asset Management, Natixis Global Asset Management has launched a green bond mutual fund that will be available to US investors.  This represents the 3rd green bond fund on offer in the US.  In an announcement dated February 28, 2017, Natixis stated that it has introduced the Mirova Global Green Bond Fund.  Consisting of three share classes (Class A, Class N and Class Y), the fund will invest in green bonds issued by companies, banks, supranational entities, development banks, agencies, regions and governments around the world.  Mirova is strongly positioned to offer such a fund.  The firm, based in Paris, specializes in responsible investing on a global scale, which includes environmental, social and governance analysis (ESG).  It has $6.8 billion in assets under management (as of 12/31/2016) and $44 billion in voting and engagement.  The firm also has been managing a green bond fund offered in Europe since January 2016.  As reported by Mirova, the firm retains a team of about 60 multidisciplinary experts include specialists in thematic investment management, engineers, financial and environmental, social and governance analysts, project financing specialists and experts in solidarity finance.  So the absence of a track record for this new fund can be offset by the firm’s experience in this sphere.  At the same time, the fund’s 95 bps expense ratio (which declines to 65 bps for Class N shareholders subject to a minimum investment of $1.0 million and 70 bps for Class Y shares subject to a $100,000 initial investment, except certain retirement plans, IRAs, Wrap fee programs and clients of RIAs) is below median but falls into the lower tier or second quartile but is richly priced for retail investors who are also subject to a maximum 4.50% sales charge1.

SUSTAINABLE INVESTING SOLUTIONS THROUGH MUTUAL FUNDS AND ETFs

Getting started
Many questions have surfaced in recent years regarding sustainable and ESG investing. Here, investors and financial intermediaries will find materials that describe the various approaches to sustainable investing and their implementation. While sustainable investing approaches vary and they have thus far defied universally accepted definitions, many practitioners agree that they fall into the following broad categories: Values-based investing, investing via exclusions, impact investing, thematic investments and ESG integration. In conjunction with each of these approaches, investors may also adopt various issuer engagement procedures and proxy voting practices. That said, sustainable investing approaches will continue to evolve. In addition to periodic updates regarding sustainable investing and how this form of investing is evolving, investors and financial intermediaries interested in implementing a sustainable investing approach will also find source materials that cover basic investing themes as well as asset allocation tactics.
Research
Research and analysis to keep sustainable investors up to-date on a broad range of topics that include trends and developments in sustainable investing and sustainable finance, regulatory updates, performance results and considerations, investing through index funds and actively managed portfolios, asset allocation updates, expenses, ESG ratings and data, company and product news, green, social and sustainable bonds, green bond funds as well as reporting and disclosure practices, to name just a few. A continuously updated Funds Directory is also available to investors. This is intended to become a comprehensive listing of sustainable mutual funds, ETFs and other investment products along with a description of their sustainable investing approaches as set out in fund prospectuses and related regulatory filings.
Investing Ideas
Thoughts and ideas targeting sustainable investing strategies executed through various registered and non-registered sustainable investment funds and products such as mutual funds, Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), closed-end funds, Real Estate Investment Trusts (REITs) and Unit Investment Trusts (UITs). Coverage extends to investment management firms as well as fund groups.
TOPICAL SUSTAINABLE RESEARCH ARTICLES OF INTEREST
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COP 28 could stimulate performance of clean energy funds

The Bottom Line: Fast tracking the energy transition at COP 28 could stimulate the performance of clean and renewable energy funds, overcoming recent poor performance.

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Interest in sustainable investing not diminishing

The Bottom Line: The campaign against ESG considerations by investment managers and investors shows no evidence so far that interest in sustainable investing is diminishing.

Read More »

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TOP SEARCHED ARTICLES

A Decade of Sustainable Funds Investing: 10 Years/10 Charts

Assets of sustainable mutual funds and ETFs close 2019 at $1.6 trillion, up from $113.5 billion ten years ago The total net assets of mutual funds and exchange traded funds (ETF)(1) sourced to sustainable investing approaches expanded dramatically in the last decade, adding almost $1.5 trillion in the last ten years.

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Are Tesla’s Senior Notes Green? Analysis of Tesla’s Sustainable Bonds

Since the announcement on August 11 and successful placement of Tesla’s $1.80 billion Senior Notes, some disappointment has been expressed by the fact that Tesla didn’t formally qualify as green the company’s newly issued notes.

Read More »

NEW RELEASE

NEW RELEASE

CONTACT US

Directly for advertising opportunities.

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Directly for advertising opportunities.

Introducing our new release of sustainableinvest.com. We publish investment research and analysis for the benefit of sustainable investors and other stakeholders.

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Original, independent, thought leadership

Our mission is to publish original, independent and thought leadership investment research and analysis to inform decision making in sustainable investing and to track trends and developments.

Anchored in a defined classification framework for sustainable funds, our research activities extend to investment strategies, portfolio construction, and the various investment alternatives encompassing sustainable investing across investment products. These include, for example, mutual funds, exchange-traded funds (ETFs), exchange-traded notes (ETNs), closed-end funds, REITs, MLPs, as well as individual securities such as stocks, long and short-term bonds, including green bonds, social bonds and sustainable bonds.

We cover the broad arc of sustainable investing approaches, ranging from values-based investing, negative screening or exclusions, thematic investing, impact investing, ESG integration, shareholder/bondholder engagement and proxy voting practices.

Our content is primarily intended to educate, inform and guide investors as well as financial intermediaries. Included are asset owners, such as endowments, foundations, and pension funds, distributors, wealth management platforms, robo-advisors, family offices as well as other sustainable investing stakeholders.

Why focus exclusively on sustainable investing?

Our mission is to publish original, independent and thought leadership investment research and analysis to inform decision making in sustainable investing and to track trends and developments.

Anchored in a defined classification framework for sustainable funds, our research activities extend to investment strategies, portfolio construction, and the various investment alternatives encompassing sustainable investing across investment products. These include, for example, mutual funds, exchange-traded funds (ETFs), exchange-traded notes (ETNs), closed-end funds, REITs, MLPs, as well as individual securities such as stocks, long and short-term bonds, including green bonds, social bonds and sustainable bonds.

We cover the broad arc of sustainable investing approaches, ranging from values- based investing, negative screening or exclusions, thematic investing, impact investing, ESG integration, shareholder/bondholder engagement and proxy voting practices.

Our content is primarily intended to educate, inform and guide investors as well as financial intermediaries. Included are asset owners, such as endowments, foundations, and pension funds, distributors, wealth management platforms, robo- advisors, family offices as well as other sustainable investing stakeholders.

What is sustainable investing?

As used here, sustainable investing refers to an umbrella term that combines at least the following investing approaches along with efficient traditional fundamental investment factors and processes to drive long-term value creation: values-based investing, exclusions, thematic investing, impact investing and ESG integration. These approaches are not mutually exclusive and may extend to include shareholder advocacy and issuer engagement, including proxy voting.

There are no universally accepted definitions or frameworks for sustainable investing, and practices continue to evolve. That said, the following six overarching approaches/strategies are commonly associated with sustainable investing:

  1. Values-based Investing – a strategy based on the guiding principle of investments that are based on a set of beliefs that contain a view toward achieving a positive societal outcome. Typically, this approach is executed via negative screening, divestiture, or divestment.
  2. Exclusionary Investing – involves the exclusion of companies or certain sectors from portfolios based on specific ethical, religious, social or environmental guidelines. Traditional examples of exclusionary strategies cover the avoidance of any investments in companies that are fully or partially engaged in gambling, sex related activities, the production of alcohol, tobacco, firearms, fossil fuels or even nuclear energy. These exclusionary categories have been extended, in recent years, to incorporate serious labor-related actions or penalties, compulsory or child labor, human rights violations and genocide.
  3. Impact Investing – a relatively small but growing slice of the sustainable investing segment, impact investments are investments directed to companies, organizations, and funds with the intention to achieve measurable social and environmental impacts alongside a financial return. The direct capital in this strategy addresses challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, affordable and accessible basic services, including housing, healthcare, and education.
  4. Thematic Investing – an investment approach with a focus on a particular idea or unifying concept. Clean energy, clean tech and gender diversity are a few of the leading sustainable investing fund themes. Investing in green, social and sustainability bonds or low carbon emitting stocks, bonds and funds also fall into the thematic investing category.
  5. ESG Integration – the investment strategy by which environmental, social and governance factors and risks are systematically analyzed and, when deemed relevant and material to an entity’s long-term performance, influence the buy, hold and sell decision of a security. Within this category of sustainable investing, significant variations exist in how ESG integration is deployed in investment portfolios.
Engagement/Proxy Voting – leverages the power of stock ownership in publicly listed companies using action-oriented approaches that rely on influencing corporate behavior through direct corporate engagement, filing shareholder proposals and proxy voting.

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Why offer research dedicated exclusively to sustainable investing?

The rapid expansion in the number of investors, investment managers, product offerings and assets under management and the continuing evolution of sustainable investing without the benefit of widely accepted sustainable investing frameworks, definitions, and rules, have contributed to confusion and misunderstanding regarding this sector of investing, the meaning of sustainable investing, and related to this, the financial and non-financial expectations or outcomes associated with sustainable investment product offerings. Affecting investors, regulators, managers, politicians, and other stakeholders, it has become increasingly difficult to differentiate between various funds and their sustainable strategies and outcomes. This makes it more challenging for investors and financial intermediaries to align investment products with sustainable goals, objectives, and values expressed by investors. As sustainable products continue to expand in number and investors, there is a growing risk that fund strategies might diverge from expectations (“greenwashing”) or may not align with investor beliefs or values and lead to disappointments or worse, in the form of redemptions and possibly litigation. The recent politicization of ESG is another manifestation of this issue.

By monitoring, scrutinizing, and reporting on trends and developments, an independent, original, research-driven information source dedicated to sustainable investing can support investors, financial intermediaries, and other stakeholders in their efforts to negotiate their way through the confusion and misunderstanding evident today in this sector of investing.

Stock and bond fund investors benefited from a rebound in 2023

The Bottom Line: Investors who held on to stocks after the decline of 18% in 2022 were rewarded but bond investors need more recovery time.

Read More »

Performance wrap up-November 2023

The Bottom Line: Positive sentiment in November pushed stock prices higher in the US and overseas while bond prices registered gains as yields declined sharply.

Read More »

Have renewable energy funds reached bottom?

The Bottom Line: Beaten down prices of clean energy stocks and related securities may be approaching a buying opportunity for intermediate and long-term fund investors.

Read More »

Sustainable mutual funds post an average decline of 1.05% in May 2023

The Bottom Line: Technology heavy and growth-oriented sustainable mutual funds and ETFs registered strong performance results in May and extended their wide performance lead year-to-date.

Read More »

Stocks, bonds and funds notched increases in November

The Bottom Line: Stocks, bonds and sustainable mutual funds and ETFs gained in November as well as all selected ESG screened indices across asset classes.

Read More »

Stocks gained 8.1% in October, but bonds dropped 1.3% on higher rates

The Bottom Line: The outperformance of selected ESG indices continue to narrow and long-term results are expected to converge and align with their conventional counterparts.

Read More »

Research

Research and analysis to keep sustainable investors up to-date on a broad range of topics that include trends and developments in sustainable investing and sustainable finance, regulatory updates, performance results and considerations, investing through index funds and actively managed portfolios, asset allocation updates, expenses, ESG ratings and data, company and product news, green, social and sustainable bonds, green bond funds as well as reporting and disclosure practices, to name just a few.

A continuously updated Funds Directory is also available to investors.  This is intended to become a comprehensive listing of sustainable mutual funds, ETFs and other investment products along with a description of their sustainable investing approaches as set out in fund prospectuses and related regulatory filings.

Getting started

Many questions have surfaced in recent years regarding sustainable and ESG investing.  Here, investors and financial intermediaries will find materials that describe the various approaches to sustainable investing and their implementation.  While sustainable investing approaches vary and they have thus far defied universally accepted definitions, many practitioners agree that they fall into the following broad categories:  Values-based investing, investing via exclusions, impact investing, thematic investments and ESG integration.  In conjunction with each of these approaches, investors may also adopt various issuer engagement procedures and proxy voting practices.  That said, sustainable investing approaches will continue to evolve.

In addition to periodic updates regarding sustainable investing and how this form of investing is evolving, investors and financial intermediaries interested in implementing a sustainable investing approach will also find source materials that cover basic investing themes as well as asset allocation tactics.

Inesting ideas

Thoughts and ideas targeting sustainable investing strategies executed through various registered and non-registered sustainable investment funds and products such as mutual funds, Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), closed-end funds, Real Estate Investment Trusts (REITs) and Unit Investment Trusts (UITs). Coverage extends to investment management firms as well as fund groups. 

Independent source for sustainable investment management company research, analysis, opinions and sustainable fund disclosure assessments