Is investing in climate funds wise?

Investing in climate funds is clearly on the rise. That is of course not strange, the polar caps are melting and the earth is warming up. Al Gore has been successful with his Inconvenient Truth and clean water is becoming increasingly scarce. But is green investing in the climate more than a hype or are you too late if you do not start investing green now? So green investing might be something for you.

Is investing in climate funds wise?

Investing in climate funds is a new investment hype. At first it was mainly sustainable investing, but now the market is clearly also responding to the soft spot of climate change. In May 2007, the first climate fund was launched by DWS Investments. You can now contact many banks for climate funds. Climate mortgages can now also be taken out, such as with the ASN bank or Triodos bank. Yet investing in a climate fund, also called sustainable investing, is not always easy. Simply because there are too few projects available.

Moreover, investing always involves risks

It is almost unnecessary to say that investing can be risky and that you would do well to be well informed. Think of the financial leaflet, the supervisory authority and so on. But there is something extra going on when investing in climate funds. They are relatively new, while our knowledge about the climate still clearly leaves much to be desired. For example, many people talk about climate-neutral flying, but it is not clear how this will work.

Pioneering and investing are difficult to combine

Investing in climate technologies is therefore still largely pioneering. Just as the internet was a pioneer during the internet hype and internet bubble. This means that money is also put into things that will not survive or will end up worthless. If an investment is accidentally made in a promising climate-friendly company and it goes bankrupt, the investment is lost.

Lemmings at the fair

In fact, the more we follow each other like lemmings and all invest in climate funds, the more expensive some funds will become and therefore the greater the risk. And then there may come a time when everyone wants to go through the same exit at the same time. On the other hand, there will always be pearls in the shell that will grow into beautiful pearls.

Track record

What matters is that you invest in funds with a good track record and good prospects. These companies really exist, because even though Al Gore’s Inconvenient Truth has created a hype, some companies have been making a very good living from the environment for a long time. And the trick is to find those companies. Ask the fund manager carefully about this and don’t be too quick to assume that it will be a good thing.

Key lock

Sometimes words like climate change and climate neutral unfortunately seem more like marketing words than beacons, on which you can safely sail with a good return. Others see their opportunity now, because a bubble in the making can still grow for a while.