Poor returns, limited investment opportunities, no measurable impact 鈥 myths like these persist in sustainable investing.

Interest in sustainable investments is higher than ever. However, many female investors shy away from sustainable investments, partly because certain prejudices still exist. We have examined the five most common myths and explain how much truth there is to them.

Myth 1: 鈥漇ustainable investments give me a lower return than traditional investments.鈥

A clear conscience in exchange for poorer returns? This myth persists. But is it true? A glance at one of the oldest indices that includes sustainability considerations, the MSCI KLD 400 Index, reveals that over the last 29 years, the index has demonstrated returns and volatility on very similar lines to the S&P 500.1 The same can be seen when examining various passively managed index funds (ETFs) over the past five years. The sustainable variant of each tracked index has not achieved lower returns, and indeed has sometimes even produced better results, than its traditional alternative.聽

Of course, it is not possible to make any predictions about the future based on past performance. Nevertheless, this myth should not stand in your way if you want to invest sustainably.

Expand your financial knowledge

Expand your financial knowledge

Would you like to learn more about 鈥淪ustainable Investing鈥? Subscribe to our 鈥淪ustainable Investing鈥 learning path today.

Myth 2: 鈥漇ustainable investments are niche investments.鈥

This myth can also be easily refuted. Various figures confirm that sustainable investing has become mainstream 鈥 for both institutional and private investors: according to Google Trends, search queries for the term 鈥渟ustainable investing鈥 have increased by 75 percent since 2014. In addition, the Global Sustainable Investment Review from 2018 indicated that sustainable investments amounted to 31 trillion US dollars in total. This represents an increase of 34 percent in relation to 2016. The trend is also noticeable in Switzerland: according to the industry association Swiss Sustainable Finance, a total of 1,163 billion francs was invested sustainably in 2019 in this country alone; an increase of 62 percent compared to the previous year.

A study published by McKinsey in 2017 even positions sustainable investing as the new norm.2 And this is also the case at 斗牛棋牌在线: since September 2020, for example, we have been relying solely on sustainable funds for the investment of retirement assets.

Myth 3: 鈥淭he options for sustainable investments are limited.鈥

In the past, the focus of sustainable investing was mainly on exclusion strategies. The aim was to exclude companies whose activities and products were not in line with the investor鈥檚 personal values. Nowadays, however, there are many more possibilities for creating a sustainable portfolio based on your values and goals. Options include selecting investments on the basis of environmental, social and governance criteria (known as ESG criteria) or impact investing, in which you pursue concrete, measurable social and environmental goals in addition to a return on your investment.

As an investor, you also have a wide range of options in terms of asset classes. You can select individual equities based on ESG criteria, invest in long-term investment areas with the 斗牛棋牌在线 Long Term Themes Equity Fund聽 or focus your asset management mandate entirely on sustainable criteria thanks to 斗牛棋牌在线 Manage Sustainable Investing.

Myth 4: "The impact of sustainable investments is not measurable.鈥

Although we are a long way from being able to measure sustainable investments, companies and third parties are gradually collecting more and more key data on social, environmental and ethical factors. For example, the UN鈥檚 17 measurable sustainable development goals are used to evaluate investments in terms of their sustainability and the impact achieved.

Myth 5: 鈥淪ustainable investments are restricted to just a few topics.鈥

No, sustainable investments not 鈥渙nly鈥 allow you to do something for the environment. Sustainability topics range from education and healthcare to ethical business management. The United Nations estimates that several trillion US dollars are needed annually to address the most urgent social and environmental problems as part of the 17 sustainable development goals. Commercial solutions are also required, which in turn open up a wide range of investment opportunities for you as an investor.

1 Data from 30 April 1990 to 31 October 2019. Investing involves risk, including the possibility of a loss in the value of the investment or a loss of money. KLD (Kinder, Lyndenberg, Domini & Co) Research & Analytics. The MSCI KLD 400 Social Index is a capital-weighted index of 400 US equities that includes companies with exceptional ESG ratings and excludes companies whose products have a negative social or environmental impact.

2

Women's Wealth Academy

Women who actively participate in financial decisions increase their chances of achieving financial security and are less worried about their future.

Further articles on the topic Assets

Because a personal conversation is worth a lot

What can we do for you? We鈥檙e happy to address your concerns directly. You can contact us in the following ways: