Vancouver, BC, Sept. 06, 2018 (GLOBE NEWSWIRE) -- Genus Capital today released a report on its five-year fossil free investment data, entitled 2018 Divestment Report. The returns of Genus Capital’s Fossil Free CanGlobe Equity Fund, detailed in the report, show investors who divested from fossil fuels from May 2013 to July 2018 did not sacrifice returns, instead yielding financial benefits without contributing to climate change. The fund outperformed the returns of its benchmark* and the overall Canadian stock market index, both of which include coal and major carbon-producing industries.
"The data from our Fossil Free funds has been consistent with each year, but what's remarkable about the 2018 Divestment Report are the results of our backtests," said Genus' Manager of Sustainable Research, Mike Thiessen. "The tests show divesting as far back as 1998 would have yielded financial returns for investors, and with the advancements being made in more climate-friendly sectors like Materials, Consumer Staples and Telecom, we can only expect to see the return potential for divested portfolios grow."
Genus' fossil free equity funds combined Canadian and global stocks into a single optimized strategy that emphasized top industries in each region, helping to fill the energy gaps with strong companies in other economically sensitive sectors with the potential to achieve energy sector-like stock price exposure.
"We launched our Fossil Free suite of funds believing it was possible to generate strong returns without contributing to climate change " said Wayne Wachell, CEO and Chief Investment Officer of Genus Capital. "With each year, the data has supported that assertion. At the five-year mark, we can conclusively say: divesting from fossil fuels pays."
Here are some of the key takeaways from the research:
- Backtesting the fossil free performance over 20 years supported the five-year data - the Genus Fossil Free CanGlobe Equity Fund outperformed both the TSX and the MSCI World Index
- Optimized portfolios without exposure to companies extracting, refining or transporting fossil fuels performed better than those with investments in energy companies creating carbon pollution
- Divestment of fossil fuel stocks and the well managed reinvestment in cleaner energy solutions, coupled with active stock selection, is a sound strategy for investors looking to avoid climate-related risks and capitalize on investment opportunities
- Divestment has the potential to reduce overall portfolio risk (because of energy sector volatility and stranded asset risk) with the transfer of assets from the energy sector to companies in climate-friendly sectors highly correlated with it, such as Materials, Consumer Staples and Telecom
The Fossil Free CanGlobe Equity Fund has outperformed its benchmarks* since its inception in 2013.
For more information and to view the report, please visit www.genusfossilfree.com
Notes to Editor
*Fossil Free CanGlobe Equity Benchmark: 35% S&P/TSX Composite, 65% MSCI World (04/01/2015 - Present) Benchmark changed from 40% S&P/TSX Composite, 30% MSCI EAFE, 30% S&P 500 (04/09/2013 - 03/31/2015). Past performance is no guarantee of future performance.
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About Genus Capital Management Inc.
Genus Capital Management Inc. is an independent investment management firm based in Vancouver, founded in 1989. We are passionate about creating innovative investment solutions that meet our clients' changing needs. With more than $1.3 billion in assets under management, Genus' clients include leading environmental organizations, foundations, and individuals across Canada. Today, Genus Capital is at the forefront of Canada's Divest-Invest movement with a complete suite of fossil fuel free funds that are tailored to meet the needs of investors who wish to invest in a sustainable, clean energy future.