Aim: Growth and income by investing in globally in the stocks of companies developing products and services to solve environmental problems
Minimum investment: Lump sun £1,000
Investment split: 100% in companies developing products and services to solve environmental problems
Isa link: Yes
Charges: Initial 5%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 020 7434 1122
The IFSL Impax environmental leaders fund aims for growth and income by investing globally in big and medium sized companies that are developing products or services to solve the world’s environmental problems.
Capital Trust Financial Management partner Bruce MacFarlane feels that amid all the concerns about the deterioration of the general global economy and possible onset of stagflation, it is refreshing from an IFA’s perspective to be able to offer clients a product in a sector, which continues to show good growth potential.
“Green funds, which in the past were seem as the domain of tree huggers are now much more mainstream as investors see the profit potential from companies investing in alternative energy, water treatment and waste management sectors,” he says.
MacFarlane points out that the fund will invest in bigger companies on a global basis, focusing on those that increase their exposure to environmental markets and embrace new environmental technologies.
“The environmental leaders fund has the potential to offer investors a profitable return with the added feel good factor that they are helping to mitigate and solve some of the world’s most pressing environmental concerns,” he says.
According to MacFarlane, Impax Asset Management has a good track record in this sector. “I feel the product is well suited to achieving its aims and objectives The charges and adviser remuneration are in keeping with the market norm,” he says.
There is little MacFarlane dislikes about this fund. “I would certainly recommend it to clients investing in this fast growing sector. Some detractors may suggest that these types of funds tend to underperform during economic downturns and periods of weak or negative stockmarket conditions, as companies in this sector tend to incur higher business costs which potential end users are reluctant to absorb during tough times.
“However, things are changing as global environmental legislation is out in place and puts a greater emphasis on the greening of all businesses. Companies willing to adopt and embrace these changes may in the future be those that the market gives a premium value to, while those that drag their heels and move too slowly are likely to be left behind.” says MacFarlane.
He concludes that this is a fast growing sector of the market, with competitors such as the Schroder global climate change fund and Virgin climate change fund among others offering more consumer awareness in the sector.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average