Drip Feed ESG Socially Responsible Investment with Tilt Funds

Last week we published a video about the perils of focused investing in things like Individual Shares, Crypto Currency, Precious Metals and ESG (Sustainable/Green/Socially Responsible funds).

See:  Quick Gain Quick Loss

Sustainable/Green/Socially Responsible investing has its own problems: with Greenwashing, Demand outstripping supply that then drives share prices higher than they should be and then they fall when governments change their Climate Action targets e.g.  electric only vehicles sales as well as ESG now becoming ‘Patient Capital’ investment i.e., patiently waiting for a return due to delayed implementation e.g.  windfarms being delayed when connecting to the National Grid.

ESG is Forced Upon Us

• Listed companies are required include with their annual report and accounts, a report on their climate action progress.
• Fund managers are required to start investing your money in companies that have climate action plans and strong corporate governance of the same.
• Financial advisers are required to raise the subject of ESG investment with all clients.
• The problem with ESG is as detailed above, it is higher risk.

In some cases, over recent years some funds have fallen 50% in value, so what is the solution?

Reduce Focused Risk and/or Timing Risk with Tilt Funds

To tilt means ‘to move, slope or incline or be drawn towards a position’.  This is what some fund managers are now doing with respect to ESG investing.

They are gradually leaning towards or ‘tilting’ fund holdings towards ESG across all sectors, not just shares.

For many fund managers, they are gradually doing this with let’s say investing in companies that have 10% lower CO² emissions than other companies in the same sector and building on this each year.  This will encourage more companies to be ‘greener’ as greater investment by fund managers is going into these lower emissions competitors.

Eventually this will mean by increasing exposure of a fund each year in a controlled manner to eventually become a true ESG fund. 

‘Tilt’ funds are available from an ever-increasing range of pension and investment companies via different products such as pensions, ISAs, GIAs and insurance bonds.

Tilt funds offer you:

Gradually becoming a more socially responsible investor by

• Spreading risk by drip feeding in over time which also reduces the ‘wait and see’ Patient Capital risk
• Spreading risk with reduced Greenwashing, as this phases out.
• Spreading risk with reduced timing risk when demand outstrips supply offering artificially inflated higher prices.

Contact Book Appt Calculators  Our Fees