Avoiding Oil stocks in a FTSE tracker

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  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    AnotherJoe wrote: »
    And presumably that could be fairly easily expanded to a global tracker with a short against oil generally?
    There are relatively few options to 'short against oil generally' because of a lack of short oil industry trackers and if you were building it manually and needed to capture the whole oil market you would be going beyond just a couple of stocks BP and Shell to look across the whole global market, you get Exxon, Total and various others (perhaps soon to add Aramco etc).
    Because you shouldn't be encouraging anyone to invest in the FTSE100/as :D
    Well the OP did say what they wanted was a 'FTSE tracker' or 'UK tracker/passive' which generally means FTSE100 or UK All-Share, and the examples of 'BP/Shell etc' implied the UK stock exchange focus.

    As I mentioned, it's not something I would 'encourage', but the thought experiment is how best / easiest it can be done, rather than whether it is wise. The OP already has plenty of threads enquiring what is wise.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    edited 14 October 2019 at 11:09PM
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    AnotherJoe wrote: »
    I think BP and Shell will have a lot of stranded assets that will hurt them. Their investments in renewable and EV charging, whilst large relatively, are microscopic in relation to their overall assets

    Climate change is going to be an expensive and drawn out affair. Like FinTech scale is the major challenge that lies ahead.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    edited 15 October 2019 at 7:53AM
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    bowlhead99 wrote: »
    There are relatively few options to 'short against oil generally' because of a lack of short oil industry trackers and if you were building it manually and needed to capture the whole oil market you would be going beyond just a couple of stocks BP and Shell to look across the whole global market, you get Exxon, Total and various others (perhaps soon to add Aramco etc).

    Well the OP did say what they wanted was a 'FTSE tracker' or 'UK tracker/passive' which generally means FTSE100 or UK All-Share, and the examples of 'BP/Shell etc' implied the UK stock exchange focus.

    As I mentioned, it's not something I would 'encourage', but the thought experiment is how best / easiest it can be done, rather than whether it is wise. The OP already has plenty of threads enquiring what is wise.

    Doh! I missed "FTSE" / assumed this was global

    OP if you really meant FTSE100 or similar, you need to be starting from a different place. (There are trackers with FTSE in the title that are global but I susoect OP didn't mean that)
  • Brian65
    Brian65 Posts: 255 Forumite
    edited 15 October 2019 at 10:12AM
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    The demise of big oil has been forecast for as long as I can remember - over 40 years. But I'm not holding my breath. Still waiting for a viable alternative that all countries will accept. As far as I can see, despite what politicians say, most countries of the world will never fully unite to protect the environment, as long as there remain benefits for themselves in opting out or cheating.
    If you don't invest in oil what can you invest in that doesn't have anything to worry about?
    Just Diversify & Chill :)
  • Malthusian
    Malthusian Posts: 10,944 Forumite
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    Thrugelmir wrote: »
    Climate change is going to be an expensive and drawn out affair.

    Precisely why any underperformance resulting from holding Shell and BP will be unnoticeable to 99% of investors. (Like the underperformance from being invested in a UK tracker holding Carillion or a US tracker holding Enron.) Trackers will reduce their exposure to Shell and BP as they slide down the tables, if that's what happens. People who don't invest in ethical funds will not suddenly find that they've lost their pensions.

    "I'm looking for UK tracker/passive funds that avoid BP/Shell etc" does not really compute. You're not looking for a UK tracker / passive fund in that case. Even if there is a passive fund that invests in every share in the UK index minus BP, Shell and unspecified others, that exclusion is a management decision.

    There are, as others have pointed out, trackers for indices like FTSE4Good which include BP / Shell and others, but we have no idea whether their list of excluded shares matches the OP's.

    If Shell and BP disappeared overnight and all energy was generated via renewables, renewable energy would become an unethical investment, due to the environmental impact of mangled birds, dead fish, rare earth metals, despoiled countryside, etc etc. Environmentalists have to protest about something, ethical funds have to have something to exclude. They can't say "everything is lovely now" and become closet trackers.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Malthusian wrote: »
    If Shell and BP disappeared overnight and all energy was generated via renewables, renewable energy would become an unethical investment, due to the environmental impact of mangled birds, dead fish, rare earth metals, despoiled countryside, etc etc..

    That is absolutely nonsense sorry.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Malthusian wrote: »
    Trackers will reduce their exposure to Shell and BP as they slide down the tables, if that's what happens.

    Given their relative size and weightings in the index. A slide is somewhat unlikely.
  • BLB53
    BLB53 Posts: 1,583 Forumite
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    The oil majors are struggling to maintain support against a rising tide of people around the world demanding urgent solutions to tackle the climate emergency. It is becoming increasingly high risk for investors to hold their shares. Exxon has recently fallen out of the S&P 500 top ten for the first time in 90 years. The global divestment of oil stocks by pensions and governments is gaining traction.

    The future is clearly renewables such as solar, wind and hydrogen and this is where the proceeds of oil divestment is heading.

    Unfortunately there are no climate-friendly UK index funds yet but I am sure the industry will be tapping into this market before too long. I the meantime there are several managed funds, renewable infrastructure investment trusts and ETFs such as iShares Global Clean Energy which offer alternatives as well as many individual shares such as Orsted.

    Many such green investments are covered on the DIY Investor site
    http://diyinvestoruk.blogspot.com/p/green.html
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    BLB53 wrote: »
    The future is clearly renewables such as solar, wind and hydrogen and this is where the proceeds of oil divestment is heading.

    Seems a small list given the uses that oil as a product has in everyday life.
  • Sailtheworld
    Sailtheworld Posts: 1,551 Forumite
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    newbinvestor wrote: »
    I'm looking for UK tracker/passive funds that avoid BP/Shell etc. Do you know of any?

    It wouldn't really be a UK tracker if you avoided BP or Shell.

    If this is an ethical quandary you find yourself in then why not invest in a UK FTSE tracker but make donations to charity to salve your conscience?
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