Clim8 on Crowdcube

What do you thinkā€¦

a. As an investmentā€¦?

b. The opportunity around ethical investing. If such a key consideration for a new generation of potential investors, could/should freetrade make product adjustments to make ethical investing choices easier?

Curious what you all make of itā€¦!

I asked them this question about why I shouldnā€™t just buy an actively-managed fund such as BlackRock Climate Change Fund. I wasnā€™t convinced by their answer. Lots of big asset managers are doing climate change and sustainability funds these days. I struggle to see why I would buy a Clim8 fund rather than a fund from BlackRock or Invesco, since how they position themselves is essentially an asset manager.

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Completely agree @piyushsg

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Good point. Thanks.

Their evaluation of market size was an eye opener to me. Wondered if Freetrade might do more to highlight funds and stocks like the Blackrock fund or similarā€¦ A sector category in discover perhaps?

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Sure.

If you want to get hold of a list of ESG or climate change related funds, your best bets would be with ETFdb (the site has a theme called ESG and sustainability) and Genuine Impact (the app has some fund themes on ESG and EV etc).

I am more of a fund guy so know less on stocks. Genuine Impact does have a ESG ranking for stocks but I donā€™t know much about that.

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I thought it looked interesting but got put off when I saw some of the legacy investments and results some of the key people were involved in that didā€™t give me so much confidence in their secret sauce on picking

Plasrecycle Limited

Sterecycle (Rotherham) Limited

This was an ambitious project , but when you look at the admins report it doesnā€™t look like the company was really on top of things.

Unless the fund grows rapidly could also see a bit of concentration risk in terms of both number of investments and if they go larger in a few how large they would be in terms of daily traded volumes which would also make them relatively illiquid or liquid with a haircut
In November someone also received 250k GBP worth of shares for services rendered to the company and I am surprised thatā€™s not been asked about on Crowdcube as thats a lot compared to the initial 400k Crowdcube ask in cash

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thanks for digging those up. without reading the lengthy documents (sorry!), you would agree with what I concluded above?

Yep agree. I also think that their model may have been hit as a result of COVDID. Their marketing materials seem to very much target millenials as the ones ripe to invest in this.

I think that millenials are going to

  1. Be hit hard by unemployment and large reduction in disposable income

  2. Move to be cash conservers rather than medium term ,or long term investors and unlikely to be taken large credit as well as I think many will have been hit hard by the recent shock events if they donā€™t have a few months free cash in the bank

I think they will struggle due to above impact on their target AUM and also as you say many more options with people where it may just be a switching. I would expect expect the TER to be higher than a lot of funds and that can be significant for low AUM funds and its not just the management fee that needs to be compared as early stage funds unless TER is capped and the management company subsidises it then investor get stiffed. SUbsidising the TER also means of course the company raising crowd will be paying the subsidy

I always used to work on a fund below 100m AUM was not sustainable looking at compliance and other overheads which made the TER a barrier to investors. If they can get 100m through the door then they have done well.

I just donā€™t think economics work here

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