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.