$400 billion by 2028 – do ETFs mark an investment revolution?

Galvanized by younger investors, the market for socially responsible funds has never been stronger, with ETFs (exchange-traded funds) available in increasingly niche categories. With more flexible trading opportunities, diverse stock portfolios and lower capital gains taxes, there are lots of benefits to choosing an ETF. Such assets are predicted to be worth $400 billion by 2028 according to BlackRock punters. But do ETFs practice what they preach? Well, it depends on the Manager, and pragmatic investors will want to read the fine print on their holdings. This GoodDive, we’re looking at three ETFs focused on Sustainable Development, LGBT and solar causes.

UN’s Sustainable Goals Fund
(SDG) +5.96%, Goodness score: 58%

A novel way of supporting the UN Sustainable Development Goals (SDGs) by investing in companies that are compatible with them. The SDGs support global development goals such as climate change, zero huger and other humanitarian priorities in 47 of the world’s least developed countries. This fund looks for exposure to global companies that aim to advance the United Nation’s Sustainable Development Goals, such as education or climate change. It targets companies that not only employ strong, socially conscious practices but also build their business around products and services that may drive positive change. Whilst this fund looks to invest in positive-impact companies that address environmental and social challenges around the world, their holdings might raise a few eyebrows for some people, with investments the likes of Proctor & Gamble in their midst.

Sun Powered Fund
+54.58%, Goodness score: 58%

With the recent climate strikes held across Australia and the world, it’s clear that demand for more renewable energy is growing amongst the public, investors and politicians alike. Couple that with rising oil prices, and there’s a lot of potential for this market to make a big impact. Sun Powered Fund, as its name suggests, shines a light on companies involved in the solar industry. The fund is made up of just 22 holdings from the US, Canada, China and other European countries. Sun Powered Fund has an Okay Goodness score of 58%.

LGBT Employment Equality Fund
+517.81%, Goodness score: 61%

This ETF promotes LGBT+ rights and equality in the workplace, allowing investors to support companies which battle discrimination and champion socially progressive policies in this regard. The inclusion criteria for this fund are ranking highly on the Human Rights Campaign Corporate Equality Index, making a profit, and liquidity. They’ve earned a Good Goodness score of 61%, but with a large roster of blue-chip companies such as Apple and Johnsons & Johnson in their rollcall, they’re not immune from People, Planet and Ethics issues.

Find other sustainable funds on Goodments, including: 

Sustainable Companies Bond Fund  (GUDB) +6,04% Goodments Score: 75
Wind Powered Fund (FAN) +14.75% Goodments Score: 62
Accessible Water Fund (TBLU) +14.81% Goodments Score: 58 

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Goodments Pty Ltd ABN 76 617 000 138 operates under Goodments Pty Ltd AFS License No. 500063. Any information provided by Goodments is general advice only and has been prepared without considering your objectives, financial situation or needs. Before making any investment decision you should consider whether it is appropriate for your situation and seek appropriate taxation and legal advice. You can see our FAQ for more information on Goodments. Data accurate as at 15 October 2019 unless otherwise specified.