PODCAST: ESG Funds Outperform in Market Downturn. And more…

ESG funds outperform in market downturn according to research by Bloomberg and Morningstar! One big reason is they are big on tech: the FANG’s – Facebook, Amazon, Apple, Netflix; and Alphabet (Google). Consumers spending more time at home due to COVID-19 are buying and using the products and services of these companies. Other news covered too

PODCAST: ESG Funds Outperform in Market Downturn. And More…

Transcript & Links, Episode 28, March 27, 2020

Hello, Ron Robins here. Welcome to podcast episode 28 for March 27, 2020, titled “ESG Funds Outperform in Downturn. And More…”—presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.

Remember that you can find a full transcript, links to content – including stock symbols – and bonus material at this episode’s podcast page located at investingforthesoul.com/podcasts.

And, Google any terms that are unfamiliar to you.

Despite the market turmoil, there are still a few analysts willing to stick their necks out in favour of ESG and sustainable investments!

Now to this episode.


A) ESG Funds Outperform in Market Downturn

This first article is highly encouraging as it reports on how ESG funds outperform in market downturn. Titled As coronavirus infects markets, sustainable funds prove their mettle. It’s written by Naveena Sadasivam and appeared on the Grist site. Here are some quotes. “Could portfolios that avoided oil and gas companies, tobacco, and other profitable but controversial industries have high enough returns to satisfy investors? Would they survive during times of market upheaval?…

According to a Bloomberg analysis, the average ESG fund fell by about 12 percent this year. That’s a big tumble, but it’s just half the decrease seen by the S&P 500 Index over the same period. A separate analysis of about 200 U.S. funds by Morningstar, a financial services firm, also found that, although ESG funds have taken a hit, they’re faring better than their conventional counterparts and are overrepresented in the top quartiles of their peer groups, in terms of their performance.” End quote.

So that’s something to help you feel better knowing that ESG funds outperform in market downturn.


10 Companies To Invest In If You Want To Fight Climate Change

Another article that could help cheer you up and refocus your attention on what is still likely the most important issue facing our planet – which is, of course, climate change!

Victoria Simpson writing on the World Atlas site has penned a post titled 10 Companies To Invest In If You Want To Fight Climate Change. However, I’m only going to cover 9 of the companies. Ms. Simpson starts with her last pick.

9) General Electric (GE)

GE is now dominant in the wind business. The company’s shares have gone down considerably in recent years, but some restructuring has them now more streamlined and focusing on aviation, healthcare and power exclusively, including wind turbines.

8) Vestas Wind Systems (VWS.CO)

It… has $8 billion in annual revenue, making this an impressive venture. From Denmark, Vestas is said to have a more than [a] 30% increase in its backlog of wind turbine orders.

7) First Trust Global Wind Energy (FAN)

First Trust Global Wind Energy is an exchange-traded fund. It holds shares in many wind-energy companies including Vestas (VWS.CO) and GE (GE).

6) Sunrun (RUN)

According to Nasdaq.com, Sunrun is a company making solar panels that is doing well. It has experienced a 200% increase since 2017 and is presently the number one residential solar installer in the US. Sales are thought to increase considerably in Florida and Texas in the near future as policy changes are opening the markets in these areas.


A key component to consuming less energy is having the right insulation in your walls… BASF is a world leader in thermal insulation materials with an estimated 6% annual growth rate projected to take place from 2019 to 2025.

4) Beyond Meat (BYND)

The market in plant-based meat substitutes has been around for a long while, but it has taken a new leap with Beyond Meat products. They have now been introduced to Tim Horton’s, Subway, Denny’s, TGIF Friday’s, and other major restaurant chains…

For those seeking a more established stock with a similar outlook, there is also Kellogg (K). The cereal company acquired MorningStar Farms back in 1999, and it is now selling 90 million pounds of meat-free proteins through names like Morningstoar, Kashi, and Gardenburger.

3) First Solar (FSLR)

In addition to Sunrun, which is mentioned above, First Solar is a company to look at when considering an investment in solar power. The company is an American manufacturer of solar panels. It is also a provider of utility-scale PV power plants and supporting services, including construction, finance, maintenance, and end-of-life panel recycling, according to Wikipedia… This is a company to watch, according to Investopedia.com.

2) Tesla (TSLA)

Tesla is not sticking to cars alone. It acquired SolarCity, a solar panel and solar roof tile manufacturer, and is it also specializing in battery energy storage from home to grid-scale.

1) United Natural Foods (UNFI)

United Natural Foods is also a prime supplier of organic foods to the public…  It could be a good bet for environmentally conscious investors.” End quotes.


B) ESG Funds Outperform in Market Downturn

Another recent article that focused on climate change investing is titled 7 Great ETFs to Invest in Climate Change. It’s written by Jeff Reeves and appeared on the US News & World Report and Yahoo! Finance sites. Some of these funds are probably among the ESG funds outperforming in market downturn. Check them out.

Here are Mr. Reeves’s suggestions and quotes by him on the seven ETFs.

1) Invesco WilderHill Clean Energy ETF (PBW)

Tied to the WilderHill Clean Energy Index… this ETF gives you a look at the major domestic names in the space. That includes conventional stocks you may think of like residential solar provider Sunnova Energy International (NOVA) as well as hydrogen fuel cell company Bloom Energy Corp. (BE). Collectively, the roughly 40 stocks in the fund add up to a pretty diversified look at alternative energy companies in America.

2) iShares Global Clean Energy ETF (ICLN)

iShares Global Clean Energy ETF covers publicly traded companies that are engaged in solar, wind and other renewable power sources around the world… The drawback here is that with only about 30 companies and a number of large-scale utility stocks like this, you get fewer of the component manufacturers and service stocks that appear in Invesco WilderHill Clean Energy ETF. So, while more geographically diverse, investors should be aware of the focus on power generation players.

3) Invesco Solar ETF (TAN)

Invesco Solar ETF tracks about two dozen solar energy players including First Solar (FSLR) and SolarEdge Technologies (SEDG)… Solar stocks are the go-to alternative energy investment for many on Wall Street, and Invesco Solar ETF allows you to play this subsector in one simple instrument. Just remember that it’s more volatile than other broader energy funds.

4) First Trust ISE Global Wind Energy Index Fund (FAN)

Wind turbines alone account for more than 8% of total energy generation in the U.S. That’s on par with both nuclear capacity and hydroelectric power capacity, and significantly ahead of the 3% share of solar. First Trust ISE Global Wind Energy Index Fund does wrap up some of the biggest dedicated plays like Denmark-based Vestas (VWS.CO)as well as firms like General Electric Co. (GE) that are major producers of wind turbines and related technologies.

5) Invesco Cleantech ETF (PZD)

If you want smaller players with growth potential or a focus on secondary technology instead of large-scale power production, Invesco offers a ‘clean-tech’ ETF designed to target companies that derive the majority of their revenue from products or services that are environmentally conscious. Among its 50 or so holdings are Luxembourg-based Eurofins Scientific (ERFSF) that designs environmental and ‘agriscience’ testing products to help measure health and environmental impact, or biologics player Novozymes (NVZMY) that is trying to replace plastics and harsh chemicals with microorganisms and natural enzymes in everyday products.

6) SPDR MSCI ACWI Low Carbon Target ETF (LOWC)

On the other side of these firms focused on green energy or natural products are the end users. And while consumer behavior matters, the fate of the planet is perhaps more reliant on the actions and business models of major corporations than individual household habits. The SPDR MSCI ACWI Low Carbon Target ETF is designed to focus on the corporations that are the most environmentally conscious.

7) Invesco Water Resources ETF (PHO)

One of the harsh realities of global warming is the increase in water demand caused by rising temperatures. This is particularly true in the American west, where states like California and Arizona have seen persistent droughts and related wildfires. The Invesco Water Resources ETF is a way to profit from this trend, however, through roughly 35 water-related holdings that include publicly traded water utilities like American Water Works Co. (AWK) as well as pump, flow control and service providers such as industrial giant Danaher Corp. (DHR).


Ending Comments

Well, these are my top news stories and tips for this podcast:ESG Funds Outperform in Market Downturn. And More…

And to get all the links, stock symbols and more, or to read the transcript of this podcast and with additional information too, please go to investingforthesoul.com/podcasts and scroll down to this episode.

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Stay well and healthy and wise with your investments!

Thank you for listening.

Talk to you again on April 7. Bye for now.

© 2020 Ron Robins, Investing for the Soul.

2 comments / Add your comment below

  1. Can you provide any insight into how ESG fund managers are assessing the scope of Unethical practices of the FAANGs?
    There may be relatively climate-friendly but there are governance issues, tax evasion, workers-rights issues, monopolistic practices, political lobbying, data mismanagement, surveilance, …. to assess, yet it seems to me that not many ESG fund managers have moved on from screening the old SRI evils to considering the scope of new-tech evils, or aren’t they worth considering?

    (Replace Netflix with Microsoft,and Google with Alphabet and you get: FAAMA, which is probably a more useful label, as MSoft is far bigger than Netflix)

    1. Sorry for this very tardy response. I’ve actually been thinking about my response for several days — and haven’t come up with anything too insightful. The reality is that ESG fund managers today, unlike the old SRI-ethical fund managers of years ago, are very driven to perform and tend to reflect the many behaviours of ‘conventional’ fund managers. Indeed, most do come from the ‘existing’ fund management industry. Hence, they found their ‘ESG religion’ after already being in the business. For myself, and many in my generation it was the reverse. We had highly developed personal, ethical-SRI values, before even entering the investment industry. That is not usually the case today. So, your concerns about them not possibly paying attention to the issues you raise are quite likely valid for many ESG fund managers.

      If you have or develop any special insights or information on this, please do enlighten myself and this site’s followers. All the best.

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