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Recently…

As reported previously, post Brexit, UK collective fund managers were only able to rely on EU guidance in classifing their funds against investors’ sustainability expectations. The EU’s first effort was known to be a high level starting point with a system that in practice meant funds would either be classified as having serious ESG ambitions and some rules to back that up or on the other had making some vague claims to considering sustainability in their stock selection.

The unavoidable vagueness of these classifications was of course instantly taken advantage of by marketing departments who got out their fat paintbrushes and rollers and started greenwashing as many funds as they could. It has taken national regulators to call out this obvious abuse and fine some extremely large global players some significant sums – a case of making an example, I suspect. A few senior employees have blown their careers on assuming that this whole ESG concept was just some woke fluffiness that was best ignored.

Quite a few of my subscribers are keen on investing in ESG (sustainable) or ethical funds. It is quite easy to find equity funds of that sort and I have written about the hazards of ethical equity fund ESG classification (a hot topic still in the investment industry). There is a ‘How to’ article on investing in line with your conscience in the permanent content of the web site.

But what about the fixed income element of your portfolio, if you now want to add one? If you do, you would be in good company as many professoonal investors have returned to this asset class very recently.

Green Bonds

(as opposed to Green Shield stamps – an aside for readers as old as me!)

It is a maxim of the investment business that a long upward trend in equity market valuations will not truly end until the market has ‘capitulated’.

This could be taken as meaning that a sell-off has reached its lowest point, but that is not something one can ever know until a recovery is clearly well set in. So we need another explanation.

A couple of years ago, I wrote a page for the web site that objectively compared the merits of active vs passive investing and the use of mulri-asset funds. If you did not see that article, here is a link.

There is actually plenty of other content dealing with the use of passive funds, multi-asset offerings and ETFs all across the web site. I recommend reading more if this is a mystery to you. The search function will help you find article and blog posts.

Towards the end of the highlighted article, I commented on the relative past performance of 4 potential purchases: a Vanguard Lifestrategy Multi-Asset Passive fund, a vintage and well thought of global investment trust, a more active managed low ciost multi-asset fund from 7IM and a ‘normal’ actively managed global equity fund with a bias towards dividends.

The then record showed that the investment trust was far and away the best performer based on recent results.

If you want to read an amusing article that seems to be about cocktails but is actually all about the correlation between economic inequality and the way it impacts consumer choice, go to the Guardian newspaper web site (April 4th) and look in the Opinion section for Richard Godwin’s article ‘Britain’s on the rocks…’

An inflation proofed consumer?

I am not sure about the ethics of investing in booze, but make you own mind up!