In the U.S., there are just 15 mutual funds (with the highest sustainability ratings from Morningstar Inc.) that have zero exposure to fossil fuels.
Q4 2021 hedge fund letters, conferences and more
Fifteen.
Zero exposure means the funds have had no investments in thermal coal extraction, thermal coal power generation, oil and gas production, oil and gas power generation and oil and gas products and services during the past 12 months, according to researchers at Morningstar.
From a universe of so many so-called sustainable funds, “it is really surprising how many still hold fossil fuels,” said Alyssa Stankiewicz, a sustainability analyst at the Chicago-based research firm.
With shares of most clean-energy stocks falling for a second straight year, there are some options for environmentally-conscience investors. Morningstar analysts recommend four funds: Brown Advisory Sustainable Growth, Calvert Equity, Parnassus Mid Cap Growth and Pax Global Opportunities.
The biggest of the four is the $6.5 billion Brown Advisory fund. Its five largest holdings, as of Dec. 31, were Microsoft Corp., Alphabet Inc., UnitedHealth Group Inc., Intuit Inc. and Danaher Corp., and the fund’s three-year annual return is 24.5%. (The S&P 500 rose at a rate of 20.4% in the same period.)
The smallest of the endorsed funds is the $131 million Pax Global Opportunities Fund. Its biggest investments were Microsoft, IQVIA Holdings Inc., Mastercard Inc., Linde Plc and HDFC Bank Ltd. at the end of September. The fund’s three-year record is an annualized gain of 18%.
Read the full article here by Tim Quinson, Advisor Perspectives
