There’s always a choice…
It has been widely reported that Tesla has invested $1.5bn in Bitcoin, which is trading at a record high at the time of writing. The investment is to create a liquid position in Bitcoin as Elon Musk hopes customers will be able to use the cryptocurrency to buy his Tesla cars. All well and good.
However, among all the excitement and interesting articles it dawned on me that there is something that bothers me about cryptocurrencies, but I am not sure why. It is a fascinating story and not for the faint hearted, despite what Mr Musk’s tweets imply. It is certainly not a store of value as “its price volatility at 80% is a dozen times higher than the Euro and sevenfold of the Russian rouble”. It remains a speculative asset and given its current fixed supply is at the mercy of sentiment, good and bad. It is also a dead asset, much like Gold, as it does not do anything, does not produce anything, not even a dividend.
The conclusion is that it is not so much I do not like cryptocurrencies as a commodity, it is that I like other methods of investing better. Investments that actually do something, something that is good and looks beyond short term individual gratification.
The end of the last decade brought with it one of the most difficult years for investors of all hues, but it marked a watershed moment for “Sustainable Investing”, which moved from the periphery to centre stage. The rate in change of investor sentiment has been rapidly supported by more and more high profile financial institutions who have begun to develop a meaningful footprint. There is now a diverse range of providers in the marketplace allowing investors a greater choice in terms of investment style and philosophy.
The performance story is strong for Sustainable funds now with a long term track record for many. Fund houses such as Edentree and Robeco have debunked the whole myth that investors are forced to give up returns to keep their values. Their funds give access to international companies well positioned to forge ahead in the future such as Renova, the Japanese renewable energy generator, which had a strong 2020 after the Japanese government committed to ambitious targets for green energy generation; Siemens Gamesa Renewable Energy, the European wind turbine manufacturing benefitting as the market revalued it in the light of Joe Biden’s victory in the US election …. the list is not endless, but you get the point.
Our IronBright Sustainable portfolios launched in 2020 have hit the ground running and are well placed to deliver on their impact and return objectives. Many of the underlying companies that investors have access to are looking forward to exciting futures: healthcare businesses responding to the need for better preventative solutions; technology companies creating a cleaner, more connected and safer world; companies with strong management teams that have looked after their workforce during 2020 who will emerge stronger and all the others addressing the urgent issues of climate change.
We may all still be locked up, bored rigid, waiting for the vaccine but we can still exert choice and influence about what are money does for us and the world around us. At your next review have a chat with your adviser about the investment options that you now have at your fingertips.
Stay safe and happy and like you we’re all looking forward to a Summer holiday!