I have a lump sum of savings (beyond the emergency fund) and I would like to start investing. I’m between 35 and 40 years old, I work as a consultant, currently on contract with a US based company and I am Italian.
My horizon of 15-20 years minimum and I already have a Degiro Italy account which I haven’t used at all.
After lurking this subreddit and others for a while, I’ve been made aware of the commonly diversified ETF-based investment strategy (which is perfectly understandable): to accumulate on a globally invested ETF with physical replication (the usually mentioned VWCE or IWDA for example which can also be found in the FAQ).
What kind of ETF I would like
I want to bring forth that I would feel very uncomfortable to proceed in such a way though, and to know that a portion of my money is directly invested in funds that re-invest in fossil fuels, deforestation et similia. That’s why I would like, if possible, to remain in the domain of Clean Energy ETFs.
I spent some time unearthing some ESG ETFs and it seems to me that the concept of ESG is quite wide and varied, and in some cases you can find questionable companies in the underlying list of investments.
I do understand that “Clean Energy” alone might be too narrow of a track to put oneself on, thus I’m open to suggestions and I’m open to compromise a bit 🙂
What ETFs I found
After a bit of research, unfortunately, I found only one accumulating ETF (there are others on fossilfreefunds.org but they can’t be found on our side of the pond):
I found a few more (only 1 available on Degiro) but they are all distributing ETFs and for what I’ve understood so far, they aren’t a good idea with the Italian taxation system (but I might be wrong) which is 26% on capital gains:
- iShares Global Clean Energy ETF – USD, ISIN
IE00B1XNHC34: 4.3 billion euros, since 2007, available on Degiro
- Invesco Global Clean Energy ETF – USD, ISIN
US46138G8472: ca. 370 million euros, since 2007, this is not available neither on Degiro nor on the Italian Exchange, so I don’t think it’d be an option
- Invesco Solar ETF USD, ISIN
TAN: 2.9 billion euros €, since 2008, this is not available neither on Degiro nor on the Italian Exchange, so I don’t think it’d be an option
Do you know any alternatives? Any other suggestions?
Again, I know the strategy isn’t what most people recommend but aside from finding an ETF that I’m comfortable with, there’s something else that’s not super clear to me:
- many people suggest to split the exposure between stocks and bonds but how does one actually do that? If I pick 80%/20%, after spending 80% of my monthly saving on the chosen stock-based ETF, what do I do with the rest? Find a bond ETF? Do clean energy bond ETFs even exist?
- given my age and horizon, what should the right split be?