Environmentally friendly investment suggestions

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26th Jul '19 by fwyburd

21 comments 1671 reads

I manage a small portfolio for one of my daughters who only wants to profit from investments that are good for the planet. Without entering into a debate about what that entails (I tend to ask her before investing whether a stock fits her environmental values), do fellow investors have any good suggestions of stocks or trusts for her portfolio over a 5year+ horizon I could suggest to her?

I'd welcome all ideas as so far I've only managed to invest 15% of her portfolio and seem to have a limited choice available.

Cheers

Francis

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About the Author

Fwyburd

Premium Member

21 comments

JohnEustace

26th Jul '19

I would consider buying shares in IMPX Impax Asset Management and also look at their holdings for ideas.

Similarly look at Liontrust Sustainable. Their literature describes their screening criteria.

https://www.liontrust.co.uk/fund-teams/sustainable-investment-team

If you can gradually get her more involved in doing her own research and take the discussion beyond her exercising a yes/no veto on your ideas then clearly that would be best but it's great that she's thinking about these issues.

fwyburd

26th Jul '19

Thank you both for your excellent suggestions.
With regard Impax Asset Management (LON:IPX) i noted that the CEO said in a presentation last year that he is not here to save the world and that IPX is not a pure play ethical investor. Which has rather put me off investing...
cheers
Francis

andrea34

26th Jul '19

I'd suggest Renewables Infrastructure (LON:TRIG) which invests in/buys eco-friendly power projects such as wind and solar farms

Carey Blunt

27th Jul '19

maybe Porvair might be a good one?

bobdouglas

28th Jul '19

Hi Francis, a very interesting question you pose and I believe your daughter has good foresight in the way investing will go in the future. Perhaps a way of addressing the present limited availability is to look at companies that are not actively damaging the planet and consider ones that will be part of a sustainable environment - one or two educational companies for example? I very much concur with her thinking and actively pursue this approach to my investing and hope others will give it some thought. bob

Edward Croft

28th Jul '19

I'm thinking of adding a crowd-sourced tagging feature to Stockopedia at some stage which might facilitate the discovery of these kinds of stocks? What do you all think of this idea?

fwyburd

29th Jul '19

Hi Ed,
Great idea, I think this would be very helpful.
cheers
Francis

fwyburd

29th Jul '19

Thanks Andrea, Bob and Carey for your contributions, much appreciated
cheers
Francis

mercury61

29th Jul '19

UK Renewable Energy Infrastructure Funds – For all the fans
an interesting 38 page research note available on Research Tree

fwyburd

29th Jul '19

Thank you Mercury.

GrahamF

29th Jul '19

It depends how much time you have to micro-manage this. I would go for a collective investment to avoid excessive time requirements.

The fund I would choose is the Royal London Sustainable World Fund

It sits in the mixed investment (40-85%) category and has come first over 1, 3, 5 and 7 years. It will give you a wider diversification than a renewables investment trust and avoid paying the premium that many of those trusts trade at.

If you are attracted to the specialist investment trusts then please pay close attention to the premium these trusts are trading at before you make a purchase. If you think that paying 10-20% more than the NAV for an investment is ok then fine. But if not then now is not a good time to buy them.

Royal London Sustainable World may not be as dark a shade of green as an investment purely in renewable energy, however, it may be sufficiently green to do the job.

mercury61

30th Jul '19

What is the ticker for this please?

GrahamF

30th Jul '19

No ticker as it is an OEIC rather than an IT or PLC

https://www2.trustnet.com/Factsheets/FundFactsheetPDF.aspx?fundCode=G5FG2&univ=U

You can buy it via an intermediary such as Interactive Investor, Hargreaves Lansdown etc. Or direct from the fund manager themselves.

fwyburd

31st Jul '19

Thanks Graham, looks like they are a consistently good performer. But their holdings don't seem to scream "environmentally friendly" so I might have to do further research here.

Largest Holdings %
1 ROCHE HLDG AG 3.46
2 ADIDAS AG 3.09
3 ASTRAZENECA PLC 3.04
4 VISA INC CLASS A SHARES COMMON STOCK USD.0001 3.03
5 RENTOKIL INITIAL 3.03
6 MICROSOFT CORP 2.96
7 LONDON STOCK EXCHANGE GROUP 2.95
8 EXPERIAN GROUP CFD CS GBP 2.88
9 CSX COM USD1 2.88
10 ANSYS COM USD0.01 2.71

cheers

Francis

mercury61

31st Jul '19

Thank you

mercury61

31st Jul '19

Graham makes a salient point re NAV and share price. The premium/discount on this plus divi yield are factors to consider. £3IN premium is 23.9% currently and a yield of 3.04%. Some are so new there isn't much data like for £USFP . £GSF released an RNS this morning re fund raise extension.

GrahamF

31st Jul '19

Hi Francis

I think one needs to take a view on whether or not being environmentally friendly means leading the way in terms of environmental performance versus your peers in your field or whether it means only investing in a very narrow range of sectors. The first means that you need to dig into the details of individual companies environmental reporting to see what they are doing to reduce energy, water, waste and VOC emissions. The second is more of a casual approach that says sector A bad and sector B good. Personally I think the second approach is a false premise. Surely better to invest in a western consumer goods company with a very strong record in taking leadership in reducing environmental impact that a solar panel manufacturer that has one of the lowest environmental performances among its peers. (Just theoretically speaking).

Another approach could be to use a sustainability index tracker. (So indexes such as FTSE4GOOD or Dow Jones Sustainability Index). These trackers and indexes should state clearly which sectors they specifically avoid. But again there is a risk that companies are included by virtue of the sector they are in rather than having a very strong environmental performance in that sector.

AnonymousUser595388

31st Jul '19

Two I hold are:
Good Energy (LON:GOOD)
ISHRS GLOBAL CLEAN ENGY USD DIST ETF (LON:INRG)

But this site might help in deciding on some green investments as the writer is in the midst of changing his investments for environmental ones:
http://diyinvestoruk.blogspot.co.uk/

mercury61

31st Jul '19

Further: Morningstar have a huge and comprehensive listings of funds. Within which is this Sector Equity : Alternative Energy.

fwyburd

31st Jul '19

More excellent contributions, thank you all, you've given me lots to research!
cheers
Francis

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Environmentally friendly investment suggestions

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Fwyburd

21 comments

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