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  • Writer's pictureStephen Walters

Change of heart

When I wrote in May I was in the region between capitulation and despondency at the state of the world, with outrage at the calibre of leadership. In the context of investment I felt unable to advise anything more successful than to endure with resilience and fortitude.

Although the scale of the world’s problems are vast, and mankind’s responses so far are minuscule; yet I notice I’ve moved nearer to the spot of hope. Thanks to the clarity of a economic campaigner called Kate Raworth, I now feel more confidence in my own perspective:

  • In terms of ecological impact, mankind is living massively beyond the carrying capacity of the planet,

  • Passions for endless growth and consumption are destroying the living planet, and creating appalling inequality,

  • Instead of attempting to grow our national economies, it’s time to live in-balance with the needs of all people, and thrive in-balance,

  • I want to live led not by profit, but by ethics. That will involve several changes for me in my lifestyle, but in terms of my work - financial planning, and investments I recommend - my further developed perspective means I want to bring still more focus onto funds that are different from ‘growth, with a little bit of green tucked-in’,

To the many of you, over the last year or so, who’ve been accumulating cash I’ve said ‘I’ll come back to you with a recommendation when I have one. I do now have just that one. It’s called the VanEck Sustainable World Equal-Weight ETF:

  • VanEck is a global fund manager founded in 1955, domiciled in the Netherlands.

  • ETF because that’s now well-proven to be a very cost-effective kind of fund through which modern retail clients can invest.

  • It’s a World fund, because I don’t have expertise to distinguish between the prospects for say, Argentina and the Philippines.

  • Sustainable means it’s signed-up to UN principles of sound corporate behaviour.

  • Equal-weight means the 256 holdings are all of similar small size. That’s good for lowering risk by diversification, which these days strikes me as very important.

Three more qualities I count very important:

  • It’s ten years old, and has now reached a mass of £480million.

  • The volatility is lower than that of the World Clean Water ETF which all of you have because I think it’s a core holding,

  • See how well it has performed against IH2O during the period since 1 March 2020, at the start of the pandemic.

For those who like detail: this fund doesn’t take side-bets, doesn’t lend or borrow money, is unhedged, pays dividends (roughly 2.5%), is traded in €, and tracks an index created by a third party (Solactive). Only 36% of the fund is invested in US companies, and no more than 18% in any one sector (eg Tech, Industrial).

If any of you would like to know more, or to confer with me about adding this to your portfolio, please drop me a line.

The risks of investment

  • Past performance is not a guide to future performance.

  • Investments go down as well as up, and you might get back less than you invested.

  • Tax treatment depends on your individual circumstances, and rules may change.

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