How to Compare Climate Aware Funds

EARTH DAY 2021: When it comes to sustainable investing, there is more choice for investors than ever before. We look at how climate funds compare, and whether they deliver

Elizabeth Stuart 21 April, 2021 | 9:47AM
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Globally, regulators are ratcheting up efforts to combat climate change and the investment industry is responding in kind with more disclosure and more ambitious targets. The 2021 UN Climate Change Conference (COP) will begin in November. At the summit, delegates including heads of state, climate experts and negotiators will come together to agree on coordinated action to tackle climate change.

Morningstar has been observing the reaction of investors closely and as of December 2020, there were 400 mutual funds and exchange-traded funds (ETFs) globally that had climate change as a key theme, with collective assets under management of $177 billion. Indeed, 2020 was a major year of development for the climate funds universe with a record 76 launches of climate mandated funds, globally assets almost tripled in one year.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Elizabeth Stuart  is associate analyst, Sustainability Research, Morningstar Europe