The definition of an Environmental fund?
By Louise Fallon, Worldwise Investor
8 September 2011 | Market News | Comments (0)
In the public sphere, the term 'Environmental' is closely linked with terms such as 'ethical' or 'green'. It is important to note that at Worldwise Investor an environmental fund is distinct from an ethical fund, an SRI fund and a responsible fund, it could fit all of these descriptions, or none.
Fund context:“Environmental” funds can be found in the Worldwise Investor fund library, an example is Allianz Global Eco Trends, which has the investment themes of Eco Energy, Clean Water and Pollution Controls. However, this has a very different make up to a fund like the Schroders Global Climate Change fund, which is evident from their top ten holdings.
We do not include within the Environmental theme funds which have ethical screens (such as Aberdeen Ethical World) which remove companies which have negative environmental impact relating to Ozone Depletion, Intensive Farming, Mining/Quarrying and Water Pollution.
An Environmental fund looks for companies with positive environmental activities, to date Skandia Ethical is the only ethical investment fund which meets this criteria. This can be found by using the filters in the fund library. While this fund seeks environmental opportunities it excludes nuclear on ethical grounds.
Many Multi-Thematic funds have a high percentage of environmental companies in their portfolios, but are able to diversify into other themes such as health to reduce the risk profile of the fund. A good example of this approach would be Cheviot Climate Assets, which invests in bonds, gold and health. This fund also takes a position on nuclear and genetic engineering, though it does not apply an ethical screen in relation to these issues (see the Worldwise investor Cheviot Climate Assets fundview)
Louise Fallon starting working for Worldwise Investor as an intern over the summer and has written a number of articles during that time.
Louise is studying for a degree in Mathematics and Economics BSc at London School of Economics and Political Science, and graduates next summer.
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