Hopfried Stutz: Protecting the environment has its price

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You also rely on stable investment funds – why? Because you’re hoping for a better comeback? Or because they want to be eco-friendly?

“Anyone who wants to do something for the environment will have a bigger impact by cycling more or using public transport and leaving their car in a garage. Or if you buy an electric car instead of a gas one.” This is Thomas Stuckey, head of investment at St. Galler Kantonalbank.

In other words: if you want to be environmentally friendly, you must be a consumer, not an investor. If demand for electric vehicles increases and demand for internal combustion engines declines, car companies will invest in electric vehicles themselves.

Yield remains. There are investors who assume that sustainable companies will generate higher returns in the long run than companies that do not deserve this rating. Swisscanto, the ZKB Foundation, is one of them. All of their actively managed investment vehicles follow a sustainable development approach. Yvan Deplaz, head of asset management, assured me they were doing it for profit, not image.

Whether he is right, we will know only in the future – if at all. Depending on the time period under consideration and depending on the investment universe, sometimes sustainable and sometimes unsustainable investments will have an edge.

And another big but: Swisscanto talks about “actively managed” investment funds. Proactive means that a group of specialists must evaluate the sustainability of individual companies. It’s long and expensive.

Astute readers of this column will know that Hopfried Stutz advocates passive investment in so-called index funds, in which an index like the SMI is mapped 1:1. Experience shows that, on average, they deliver higher returns than actively managed funds. Not only because of the lower costs, but also because the fund manager rarely manages to repeatedly outperform the index over a long period of time.

If my enthusiasm for sustainable investment is limited, the same is true for private investors. Due to their size, institutional investors such as pension funds, investment funds or large corporations can influence corporate strategy in the exercise of their shareholding rights. For example, they can convince oil companies to invest some of their profits in wind farms. This is called impact investing.

Private investors do not have such an opportunity. But you can invest in an oil stock fund. This has little to do with sustainability; but with return. The S&P Global Oil Index, which includes the top 120 oil and gas producers in the world, is up 35% in 2021 and another 19% in 2022.

Source: Blick