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ESG Global All Cap UCITS ETF V3AM

Index tracking funds and ETFs
Dumbfool
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ESG Global All Cap UCITS ETF V3AM

#401872

Postby Dumbfool » April 5th, 2021, 2:14 pm

Hi All,

Just wondering as the above fund is new to the market (concept is not) would a single investment with irregular contributions be a good investment for circa 3-5 years.

mc2fool
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Re: ESG Global All Cap UCITS ETF V3AM

#401877

Postby mc2fool » April 5th, 2021, 2:45 pm

Well, as you say, it's new, just three weeks old, so there's not a lot to go on regarding the fund itself.

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-global-all-cap-ucits-etf-usd-distributing

One can, however, look at the factsheet of the index it tracks:

"The FTSE Global All Cap Choice Index measures the performance of the FTSE Global All Cap Index after excluding companies involved in Vice Products (Adult Entertainment, Alcohol, Gambling, Tobacco), Non-Renewable Energy (Nuclear Power, Fossil Fuels), and Weapons (Chemical & Biological Weapons, Cluster Munitions, Anti-Personnel Landmines, Nuclear Weapons, Civilian Firearms, and Conventional Military Weapons). Companies are also excluded based on Controversial Conduct."

https://research.ftserussell.com/Analytics/FactSheets/Home/DownloadSingleIssue?openfile=open&issueName=FGACC&isManual=False

(Or go to https://www.ftserussell.com/products/indices/global-choice and scroll down and click on FTSE Global All Cap Choice Index under Factsheets).

As a subset of the FTSE Global All Cap Index, unsurprisingly the top holdings are Apple, Microsoft, Amazon, Alphabet, Tesla, etc. It is interesting, however, that it has outperformed the All Cap index over 1, 3 & 5 years, and with a little less volatility too....

xxd09
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Re: ESG Global All Cap UCITS ETF V3AM

#401946

Postby xxd09 » April 5th, 2021, 11:48 pm

Sadly “ethical” funds which are not a new concept never perform as well in the long run as total market index funds
So you have to decide what you want to prioritise from your investments
Growth or the wish to make a political statement
You pays your money and makes your choice
xxd091

mc2fool
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Re: ESG Global All Cap UCITS ETF V3AM

#401951

Postby mc2fool » April 6th, 2021, 12:55 am

xxd09 wrote:Sadly “ethical” funds which are not a new concept never perform as well in the long run as total market index funds

Just curious, which other passive ethical funds/ETFs are you basing that comparison on?

xxd09
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Re: ESG Global All Cap UCITS ETF V3AM

#401974

Postby xxd09 » April 6th, 2021, 10:17 am

I recollect them being on offer many years ago under various names like Stewardship fund etc
Thy can be found in Google under “Ethical Funds” plus their historical performances
Ethical investment has ben on the go since investing started but never seems manage to go mainstream
All seem to have disappeared-poor performance presumably
The ESG funds seem to be the next incarnation
Who knows -may be their time has come-cannot disagree with their principles but investors have to live in the real world so must be aware
xxd091

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Re: ESG Global All Cap UCITS ETF V3AM

#402029

Postby mc2fool » April 6th, 2021, 2:12 pm

xxd09 wrote:I recollect them being on offer many years ago under various names like Stewardship fund etc
Thy can be found in Google under “Ethical Funds” plus their historical performances
Ethical investment has ben on the go since investing started but never seems manage to go mainstream
All seem to have disappeared-poor performance presumably

Well you haven't answered my question but it seems you want me to go off to find evidence to support your assertion. :o (Which, according to you, I shouldn't be able to find anyway 'cos they "All seem to have disappeared"! LOL)

To be clear, mine was a genuine question; I come into this without any particular opinion or preconceptions on the matter. However, I did do a search and came up with:

"Majority of ESG funds outperform wider market over 10 years

Study of sustainable funds counters claims that ESG investment comes at the expense of performance
"

https://www.ft.com/content/733ee6ff-446e-4f8b-86b2-19ef42da3824 or if that hits a paywall
https://www.google.com/search?q=site%3Aft.com+%22Majority+of+ESG+funds+outperform+wider+market+over+10+years%22 and click on the resultant link.

On funds "disappearing", the above article also says: ""Morningstar found that sustainable funds have greater survivorship rates than non-ESG vehicles. On average, 77 per cent of ESG funds that were available 10 years ago still exist, compared with 46 per cent for traditional funds.

If anyone wants to see the actual report of the study the FT is referring to one can sign up to get it as https://www.morningstar.com/en-uk/lp/Eu ... erformance, however that page says that Active Funds Dominates (and I suspect your anecdotal comments also refer to active funds) and this board and the OP's query are about passive funds. On that matter I found:

https://www.ishares.com/uk/professional/en/literature/brochure/ishares-sustainable-mythbusting-index-investing-en-emea-pc-brochure.pdf, which includes:

"Myth 6: You have to sacrifice performance when using sustainable indexing.

Fact: Early evidence on ESG index performance strongly challenges the tired misconception that sustainable investing requires giving up financial returns for better ESG outcomes.
"

However, while iShares has quite a number of ESG EFTs, they are all pretty new (within the last 3 years it seems), so we can't judge long term performance, and Investors Chronicle did an article on ESG funds a couple of issues back (which I can't find online) in which it was opined that the out-performance of ESG ETFs was at least partly due to the large amounts of money going in, hence bidding up the prices of the constituent companies.

I suppose that could also work from the other side too, if investors follow the likes of the Norwegian sovereign wealth fund (ironically built from oil revenues) and dump non-ESG companies, such as fossil fuel ones, depressing their prices, then the ESG indices would outperform 'cos the non-ESG ones would be under-performing .... https://www.theguardian.com/business/2019/jun/12/worlds-biggest-sovereign-wealth-fund-to-ditch-fossil-fuels

torata
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Re: ESG Global All Cap UCITS ETF V3AM

#402068

Postby torata » April 6th, 2021, 4:16 pm

mc2fool wrote:To be clear, mine was a genuine question; I come into this without any particular opinion or preconceptions on the matter. However, I did do a search and came up with:
<Snip>

That's an impressive amount of (re)search.
Have a rec.

torata

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Re: ESG Global All Cap UCITS ETF V3AM

#402071

Postby Hariseldon58 » April 6th, 2021, 4:25 pm

ESG has made some shares rather unpopular of recent years and depressed prices, so recent outperformance of ESG does not surprise me and its quite likely the trend will continue, that may well change behaviour or those 'sin' stocks may become relative bargains.

My crystal ball becomes cloudy...I must admit I'll stick with total market, mainly on the grounds that ESG criteria are often a little fuzzy when you look closely and such subjective choices are probably better suited to an active approach. The big ETF index fund providers are becoming more active and exerting pressure to change behaviour and that does suggest that the total market and the ESG market will become ever closer.


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