Due to essential maintenance, it won't be possible to log into your account on Sunday morning (14 April). We're sorry for any inconvenience and will complete the work as quickly as possible.

OneFamily
Home > Savings insights > How our climate-friendly fund generated higher returns

How our climate-friendly fund generated higher returns

November 2022

If you have a OneFamily ISA or Lifetime ISA, then you may have chosen to invest your money in our climate-friendly fund, Global Equity.

You might have chosen OneFamily for this very reason. Like us, you want to do what you can to protect the environment and don’t want to invest your money in companies that don’t share your moral values.

Whatever your reason, we’re sure you’ll be happy to hear that in our most recent performance summary (1 July – 30 September 2022), OneFamily's Global Equity Fund outperformed the index we benchmark against (MSCI World Index).

In fact, our climate-friendly fund generated 0.38% higher returns than the benchmark!

Returns for OneFamily Global Equity Fund versus the corresponding benchmark as of 30 September 2022:

Three months Since inception
OneFamily Global Equity Fund (Gross) 2.44% 9.16%
MSCI World Index 2.06% 8.82%
Difference 0.38% 0.34%

Why did the climate-friendly fund outperform the benchmark?

Investment funds tend to invest in several different types of assets, including shares in companies. Climate-friendly funds, like ours, choose these companies based partly on how they make their money.

We look at how much carbon they produce for the money they make, whether they violate UN principles, like human rights violations, and, crucially, how prepared they are for climate change. This is called “climate change preparedness” or “adaptation score”.

Generally speaking, companies that are taking action now, for example by reducing their carbon output before rules and regulations are brought in, stand a greater chance of us including them in our fund portfolio.

They can be seen as being more ready for the future than companies that aren’t yet taking action. For obvious reasons, we feel that future-proof companies are a safer long-term investment.

How companies' actions impact where we invest

We’re constantly changing our portfolio based on how well companies fit with our climate-friendly principles.

That means, if a company starts to rely more on fossil fuel reserves for example, their score is likely to drop and we'll invest less of the fund in their shares or even stop investing in them entirely.

But if a company starts to improve their score, for example by changing their practices to be more prepared for climate change, we might start to buy their shares.

This sends a message, or "signal", to those companies that our fund rewards actions that have a positive impact on the environment.

With stocks and shares products, the value of your investment can go down as well as up and past performance is not a reliable indicator of future results.

You may also be interested in:

How does the annual ISA allowance work?

You can put up to £20,000 in ISAs in your name each tax year. This limit is set by the HMRC and reviewed each year.

Lifetime ISA: cash vs stocks and shares

You can open either a cash or a stocks and shares lifetime ISA, depending on which you feel is right for you.

How to plan for long-term savings goals

Long-term savings goals tend to revolve around something you aim to save for over the next five years or more.

How we're supporting our community

Working with charity partners to support our communities has been a key focus of ours for many years.