Green alternative to VLS 100 for SIPP?

justcheckin

Hello.

Following guidance from you good people in 2017 I set up SIPPs for myself and other half and have been investing in VLS 100 ever since.

Recently I have been feeling that I need to make greener choices. I don't want to divest (have 400k in VLS 100) but would like to make different choices with new money. Have 40k to invest today.

Any starting places you would recommend I read or look?

Thanks

r6mile

Vanguard have the Sustainable Life 80-90% fund, which is a similar concept to VLS100 except its actively managed.

It’s where my SIPP is going to be invested as soon as the transfer to Vanguard is complete.

Vanguard also have a Global Sustainable Equity Fund which is 100% equities.

Sunnylifeover50plan

out of interest do funds, without the sustainable tag line, avoid good value sustainable investments? 

dunstonh

Any starting places you would recommend I read or look?

It depends on what ethics you intend to apply.  Ethical and ESG are different, but you have the same considerations when researching the funds. Just in a slightly different way.

Off the shelf, generic ESG or ethical options tend to be aimed at people who want to feel better about things but don't have strong ethical or ESG beliefs.   There are also concerns about greenwashing in those sorts of funds as they don't dig as heavily into the ESG or ethical positions of companies.

If you have stronger beliefs, you will need to spend a bit more time on it focusing on what in particular you are looking to focus more on or not have at all in the portfolio.   

You mention green but that can fall under ethical or ESG.    It could be that you mean you want to focus more on green energies or pollution reduction or just be green in general.  

Following guidance from you good people in 2017 I set up SIPPs for myself and other half and have been investing in VLS 100 ever since.

VLS100 is the weakest fund in the VLS range and not that popular here.    However, you could have done a lot worse.

As you have a SIPP, you have a lot more choices and don't need to stick to Vanguard.  (unless you have gone in the SIPP-in-name-only-but-not-really a SIPP Vanguard product)

Vanguard have the Sustainable Life 80-90% fund, which is a similar concept to VLS100 except its actively managed.

VLS100 is semi-actively managed too.   So, the OP may well be open to that.

out of interest do funds, without the sustainable tag line, avoid good value sustainable investments? 

No.   Conventional investing can invest pretty much anywhere.   ESG or ethical funds have remits to remove areas or focus on specific areas.

Historically, ESG and ethical investing have both resulted in lower returns than conventional.   Occasionally, an area that they focus in will do better (or they avoid an areas that they are not in that does worse) and you get the odd year they are stronger but they usually fall back again quite quickly.

Albermarle

The FCA is clamping down on funds claiming ESG credentials with little hard evidence. So called greenwashing.
FCA to crack down on misleading ESG disclosures | ICAEW
I read somewhere else that tighter regulation could result in the number of funds claiming to be ESG significantly falling in future.

justcheckin

Thank you all.

I don't think I know enough at the moment to do much better but will try to learn.

I chose vanguard lifestrategy 100 on strength of 'set it and forget it' and that in 2017 I felt I had a long investment horizon. 

I think now that I would like to start accessing the monies at age 55 (SIPP is Fidelity so I am allowed to, I am 49).

Re: green/ethical, my main driver would be climate change. I think Aviva are attractive from this perspective having heard a podcast about their investment principles.

Albermarle

justcheckin said:

Thank you all.

I don't think I know enough at the moment to do much better but will try to learn.

I chose vanguard lifestrategy 100 on strength of 'set it and forget it' and that in 2017 I felt I had a long investment horizon. 

I think now that I would like to start accessing the monies at age 55 (SIPP is Fidelity so I am allowed to, I am 49).

Re: green/ethical, my main driver would be climate change. I think Aviva are attractive from this perspective having heard a podcast about their investment principles.

Have you looked at Fidelity's offering.
Sustainable Investing | ESG Funds | Fidelity

Pipthecat

This report is a few years old but it does highlight the challenges of understanding what's 'green' Is ethical investing just too difficult? - Which? News  This snippet stuck with me

Take Royal Dutch Shell, the global oil giant, as an example:

• A traditional ethical fund, with a focus on climate change, might exclude Shell for its involvement in fossil fuels (negative screening);
• A 'light green' fund might embrace Shell (positive screening), because of its extensive wind power and solar businesses;
• An ESG fund might include Shell because it considers Shell's management to have properly prepared for the dangers posed by climate change - despite Shell's contribution to that change.

My personal decision was not to invest specifically in ethical or green

Pat38493

You could check out the site called diyinvestoruk
https://diyinvestoruk.blogspot.com/

This guy has written a few books about investing and he has been researching and investing in ethical and/or green investments for a while.  

I agree with some other posters that this is a bit of a tricky area where you have to do some research.  Case in point - the company I work for is at the top of the table in our industry for progress towards net zero, but as far as I can tell, a lot of it is achieved by effectively "outsourcing" the same pollution to someone else rather than removing it from the planet.  That's not to say they are not making significant efforts in some areas, but I have a horrible feeling that those efforts only make a 20% difference and the other 80% is basically smoke and mirrors where it's just been transferred to another company.

Albermarle

Pat38493 said:

You could check out the site called diyinvestoruk
https://diyinvestoruk.blogspot.com/

This guy has written a few books about investing and he has been researching and investing in ethical and/or green investments for a while.  

I agree with some other posters that this is a bit of a tricky area where you have to do some research.  Case in point - the company I work for is at the top of the table in our industry for progress towards net zero, but as far as I can tell, a lot of it is achieved by effectively "outsourcing" the same pollution to someone else rather than removing it from the planet.  That's not to say they are not making significant efforts in some areas, but I have a horrible feeling that those efforts only make a 20% difference and the other 80% is basically smoke and mirrors where it's just been transferred to another company.

Yes it is like an airline claiming it is green or aiming for net zero.
How in any rational persons world can building an aircraft/airport and then sending that plane back and forth daily across the world, be classed as environmentally friendly, regardless of a lot of guff about sustainability, tree planting etc 

dunstonh

I chose vanguard lifestrategy 100 on strength of 'set it and forget it' and that in 2017 I felt I had a long investment horizon. 

VLS20, 40, 60 & 80 are multi-asset funds.  VLS100 is a global managed fund.   Many believe it only exists for completeness.  However, given the amount invested in that fund, there is a clear commercial benefit for Vanguard!      Typically, if you want passive and want 100% equity you would go with a global tracker instead.   Cheaper and without the home bias management decision on VLS100.

It wasn't by any means a bad decision.  It just isn't optimal.