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Non woke, non-ethical pensions

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  • Of course you might argue about the ethics of capitalism and decide that investment funds that provide people with gain without them doing any work are fundamentally unethical. But to answer your question I think the closest you'll come to funds that don't have ESG criteria are index tracker funds.
    And so we beat on, boats against the current, borne back ceaselessly into the past.
  • Universidad
    Universidad Posts: 414 Forumite
    100 Posts Second Anniversary Name Dropper
    edited 31 March at 1:39PM
    dunstonh said:
    Don't you think it is more likely to be due to the credit crunch? 
    Nope, it's definitely because of woke.
    Not quite. It is coincident with the number of people saying "woke".  Rarely uttered before then, blabbered all the time after. 
    It is certainly coincident, but also the other word with the same root.
    Ironically, for all the people complaining about wokeness, I have literally only ever heard the word "woke" unironically used by those opposed to it.
  • dealyboy
    dealyboy Posts: 1,930 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    I would like to comment regarding ESG, Governance, Woke + Authoritarianism but unfortunately this is political.
  • Tammer
    Tammer Posts: 403 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Empirical evidence is that, over the long term, responsible funds give higher returns.

    One to ponder when considering short term volatility possibly.
  • eskbanker
    eskbanker Posts: 37,059 Forumite
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    dunstonh said:
    Historically, ESG, ethical, responsible or sustainable have all resulted in lower returns over the long term. 
    Tammer said:
    Empirical evidence is that, over the long term, responsible funds give higher returns.
    Anyone care to substantiate these diametrically competing claims with credible and citable sources?
  • Bostonerimus1
    Bostonerimus1 Posts: 1,401 Forumite
    1,000 Posts Second Anniversary Name Dropper
    edited 20 November 2023 at 1:58AM
    eskbanker said:
    dunstonh said:
    Historically, ESG, ethical, responsible or sustainable have all resulted in lower returns over the long term. 
    Tammer said:
    Empirical evidence is that, over the long term, responsible funds give higher returns.
    Anyone care to substantiate these diametrically competing claims with credible and citable sources?
    Just shove it into a few index trackers and go and have a G&T or a Margarita. With regards to ESG vs anything else etc., angels and the heads of pins come to mind.
    And so we beat on, boats against the current, borne back ceaselessly into the past.
  • dunstonh
    dunstonh Posts: 119,641 Forumite
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    edited 20 November 2023 at 11:16AM
    eskbanker said:
    dunstonh said:
    Historically, ESG, ethical, responsible or sustainable have all resulted in lower returns over the long term. 
    Tammer said:
    Empirical evidence is that, over the long term, responsible funds give higher returns.
    Anyone care to substantiate these diametrically competing claims with credible and citable sources?
    ESG is a difficult one as few ESG funds have a long history.    Sustainable/responsible is easier as they have been going longer.   However, you are still looking at mostly managed funds.

    Typically, when you look at past performance, you see the odd year were SRI/ESG does better.  In the years following that, you usually see a range of marketing reports or opinion pieces saying that SRI/ESG is the new way.    And usually, it's followed by a period of underperformance, and it all goes quiet again.

    Here are two global trackers with similar regional allocations.  It needs to be as close as possible for any comparison to be fair.  And the benchmarks as close as possible.

    L&G MSCI World Socially Responsible Investment (SRI) Index

    Benchmark:MSCI World SRI


    and

    Fidelity Index World

    Benchmark: MSCI World Index (Net)


    Very small differences in the regional make up and benchmarks are effectively the same except one is conventional and the other is SRI.

    And here is the past performance:



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Pat38493
    Pat38493 Posts: 3,328 Forumite
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    You would have thought that if a large potion of the global markets is prioritizing investment in certain topics like green energy and decarbonization, those industries are likely to do well.  For example, if large investments are made across most countries in buying windmills, companies that make windmills are likely to do well regardless whether you personally agree with wind power or suchlike.  You would have thought that in future, companies that are involved in topics that are given regulatory priority by the world's voters and governments should do well.
  • Linton
    Linton Posts: 18,154 Forumite
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    edited 20 November 2023 at 12:38PM
    Pat38493 said:
    You would have thought that if a large potion of the global markets is prioritizing investment in certain topics like green energy and decarbonization, those industries are likely to do well.  For example, if large investments are made across most countries in buying windmills, companies that make windmills are likely to do well regardless whether you personally agree with wind power or suchlike.  You would have thought that in future, companies that are involved in topics that are given regulatory priority by the world's voters and governments should do well.
    Yes, but windmills are a very niche investment sector, hardly appropriate for a significant holding in a diversified portfolio.  I think you will find that the poor performance of the SRI fund compared with the world tracker is caused by what it does not invest in rather than what it does.

    I think people should look carefully at the SRI fund before investing - Microsoft is its largest holding at 17.2% followed by Tesla at 4.1%.  35% of its total assets are in the top 10 holdings.  These figures compare with a developed world tracker's largest holding being Apple at 5.2% followed by Microsoft at 4.6% with 21% of assets in top 10 holdings.  So the SRI fund's diversification could be questioned.

    Perhaps someone could explain why Microsoft is SRI compliant whilst Apple, Amazon, Google and Meta (Facebook) aren't. 

  • LHW99
    LHW99 Posts: 5,225 Forumite
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    followed by Tesla at 4.1%

    I have to say, I do wonder whether EV manufacture (not just Tesla) is actually any better for the environment than encouraging people to keep their existing cars longer.

    For example, the damage caused by the extraction of battery materials is significant.

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