Can you grow your money while also protecting the environment and supporting a good cause? It might sound utopian, but it’s easier than you think. Investing in sustainable companies has become a popular trend, and with BUX Zero you can do exactly that through a range of sustainable ETFs. If you want to invest sustainably, there are a few different ways to go about it:
- Invest based on a company’s ESG (environmental, social and governance) score.
- Invest according to certain exclusion criteria.
- Impact investing.
Let’s explain each of them below.
ESG investing is one of the easiest strategies to employ. Every company is given an ESG score, which rates according to the environment, social and governance criteria. You can simply pick the highest-rated companies. However, this option is arguably the least sustainable of the three as the scores are evaluated by third-party providers, like fund managers.
Using the exclusion strategy means excluding certain investments from your portfolio. For example, maybe you don’t want to support industries like alcohol, weapons or tobacco. Or perhaps you want to avoid investing in businesses that violate international conventions.
The final option, impact investing, means investing in companies which are actively contributing to positive environmental and social outcomes.
Sustainable and profitable?
Companies can indeed make a positive difference while generating profits. In fact, studies show that “green” investments often generate similar or even better returns than traditional funds. Learn more about this in our previous article on sustainable investing.
ESG investments have also grown strongly in the past year. In 2021, some $120 billion was allocated to these funds, which is more than double the $51 billion in 2020.
Are you interested in investing in sustainable ESG funds with BUX Zero? We’ve got plenty! Keep reading to find a summary of each one, along with a brief description and the companies they include. Of course, as an investor you’ll want to know how a fund performed in the past, so you’ll also find year-to-date returns for each ETF. Keep in mind that past performance is no guarantee of future results.
To learn more about ETFs, visit our ETF Knowledge Centre.
UBS ETF – MSCI Pacific Socially Responsible UCITS ETF
This ETF invests primarily in companies in the Asia-Pacific region, with a focus on social responsibility. Companies include Sony, Fujitsu and Daikin Industries.
- Year-to-date return: 0.65%.
- Fund size: €1.014 billion
- Number of holdings: 94
UBS ETF – MSCI Japan Socially Responsible UCITS ETF
This ETF invests in Japanese companies that prioritise social responsibility. Multinationals like Fujitsu, Fujifilm, Panasonic and Sony are included, as well as some smaller companies.
- Year-to-date return: -3.61%.
- Fund size: €699 million
- Number of holdings: 57
UBS ETF (LU) MSCI USA Socially Responsible UCITS ETF
Environmental protection, social responsibility and ESG criteria are also very important to the companies in this ETF. Companies that generate a large part of their revenue from non-sustainable areas are actively excluded. Some of the companies in this ETF include Tesla, Microsoft, PepsiCo, Coca-Cola, Blackrock and Cisco.
- Year-to-date return: 22.21%.
- Fund size: €1.922 billion
- Number of holdings: 124
Lyxor Global Gender Equality (DR) UCITS ETF
ESG isn’t just about environmental protection but also social responsibility. This ETF includes companies that promote gender equality in their corporate policy. The fund excludes companies in the weapons, gambling and tobacco industries. Within this ETF, you’ll find companies like Ford, Merck, Microsoft and Spotify.
- Year-to-date return: 16.24%.
- Fund size: €51 million
- Number of holdings: 151
Lyxor MSCI New Energy ESG Filtered (DR) UCITS ETF
Here, the focus is on renewable energy, including solar, wind and hydroelectric power. This ETF includes companies from the US, Spain, France, Denmark and more. Some companies included are Schneider Electric, Enphase Energy and Plug Power.
- Year-to-date return: -16.33%.
- Fund size: €1.08 billion
- Number of holdings: 39
Lyxor MSCI Europe ESG Leaders (DR) UCITS ETF
If you want to invest in Europe’s leading ESG companies, this is the ETF for you. It includes big names like ASML, Unilever, SAP, Allianz and GlaxoSmithKline.
- Year-to-date return: 15.32%.
- Fund size: €1.483 billion
- Number of holdings: 199
Lyxor MSCI World ESG Trend Leaders (DR) UCITS ETF
With over 750 stocks, this ETF can really help you diversify your investments. All companies in this fund have a strong ESG profile compared to others in their sector. Companies with a negative impact on society or the environment are actively excluded. This ETF includes companies like Tesla, Adobe, Microsoft, NVIDIA, Alphabet and ASML.
- Year-to-date return: 19.68%.
- Fund size: €590 million
- Number of holdings: 784
Lyxor MSCI USA ESG Trend Leaders (DR) UCITS ETF
This ETF includes more than 300 large and medium-sized companies from the US with a high ESG score. Its holdings include Microsoft, Tesla, Alphabet, Salesforce, Adobe and NVIDIA.
- Year-to-date return: 26.30%.
- Fund size: €295 million
- Number of holdings: 321
Rize Sustainable Future of Food ETF
This ETF follows the growth of sustainable food companies around the world. Companies like Beyond Meat, FMC and Calavo are included. The Future of Food ETF won the 2021 ESG Investing Award for Best ESG Investment Fund.
- Year-to-date return: -5.01%.
- Fund size: EUR 248 million
- Number of holdings: 45
Rize Environmental Impact ETF
This is a relatively new ETF and focuses on companies that are taking active steps to create a greener world. The ETF includes companies like Tesla, Sunpower and First Solar.
- Year-to-date return: -% (not yet available)
- Fund size: €12 million.
- Number of holdings: 99
Van Eck Sustainable World Equal Weight ETF
This ETF invests in companies across the globe, primarily from the developed world, that are focused on sustainability. All of these companies are equally weighted, but the North American, European and Asian regions are limited to a maximum weight of 40%. It includes companies like NVIDIA, Tesla, ASML and Oracle.
- Year-to-date return: YTD: 15.37%.
- Fund size: €455 million
- Number of holdings: 253
iShares US Socially Responsible ETF
This ETF only includes companies from the United States, and each one has a high ESG score. The maximum weight of a single company is limited to 5%. It includes big names like Tesla, Microsoft, NVIDIA, PepsiCo, Coca-Cola and Walt Disney.
- Year-to-date return: 23.66%.
- Fund size: €7.872 billion
- Number of holdings: 133
iShares Japan Socially Responsible ETF
This ETF only includes companies from Japan, and each one has a strong track record with environmental protection and social responsibility. Some of the companies in the fund are Sony, Fujitsu, Fujifilm and Softbank.
- Year-to-date return: 1.63%.
- Fund size: €836 million.
- Number of holdings: 65
iShares Global Clean Energy ETF
The defining theme of this ETF is “clean energy”. The fund includes many popular renewable energy companies, like First Solar, Iberdrola and Plug Power.
- Year-to-date return: -40.75%.
- Fund size: €4,087 million.
- Number of holdings: 76
iShares Emerging Markets Socially Responsible ETF
This ETF focuses on companies with a high ESG score from emerging markets. It’s heavily weighted to stocks in China, Taiwan, South Africa and South Korea. The maximum weight of individual companies is limited to 5%. It includes Nio, LG Chemical, BYD, Naspers and more.
- Year-to-date return: -1.89%
- Fund size: €3.11 billion
- Number of holdings: 180
You can find more information about all these ETFs by clicking their titles which will take you directly to their profiles in Bux Zero.
All figures are correct as of January 26 2022.
All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.