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I don't know if I'm getting the most profitable SRI / climate change ETF, can you help? (linux.community)

submitted 4 days ago by eli04@linux.community to c/personalfinance@lemmy.ml

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cross-posted from: https://linux.community/post/2819981

SRI ETF = social responsible index exchange trade fund

I'm a total newbie looking for one world ETF for a 30 year investment to keep it simple and to reduce risk.

ETFs I'm considering are

MSCI World SRI Index (USD) https://www.msci.com/documents/10199/641712d5-6435-4b2d-9abb-84a53f6c00e4

MSCI World Climate Change ESG Select Index (EUR) https://www.msci.com/documents/10199/84e37acb-a91e-8ff3-a909-6f8c7c6306dd

most people I asked know about the SRI but not about the climate change one. climate change's annual performance is way higher than SRI's. Very unsure about how to proceed.

Just to be sure, annual performance is way more important than the cumulative index performance - net returns, right? Because here climate change is better than SRI.

If I'm US based, is it better to invest in a USD denominated ETF or does it simply don't matter if I invest in a EUR denominated one (like climate change)?

How does trump play into all of this?

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[–] Otherbarry@lemmy.frozeninferno.xyz 6 points 4 days ago

If I’m US based

Assuming you are then you should be looking for a USD ETF. The ETF itself doesn't have to be investing in U.S. based companies (and in fact there are many, many USD ETFs focused outside the US).

ETFs I’m considering are MSCI World SRI Index (USD) https://www.msci.com/documents/10199/641712d5-6435-4b2d-9abb-84a53f6c00e4 MSCI World Climate Change ESG Select Index (EUR) https://www.msci.com/documents/10199/84e37acb-a91e-8ff3-a909-6f8c7c6306dd

Keep in mind those are indexes, not ETFs. You are going to want to look for an ETF that is following the particular index(s) you are looking at. So for example the second index you mentioned does list one ETF that is following that index, see the main page for that index and click "Index-Linked ETPs"

https://www.msci.com/indexes/index/728912

The only ETF listed there is a EUR ETF, there may be no USD ETFs following that index. Your next step is trying to find a brokerage in the U.S. that allows you to invest in that ETF... Thing is, those brokerages will sell you access to invest in USD ETFs, not EUR. A ETF for EUR markets is primarily going to be offered in countries that trade in EUR.

Main point: Tons of indexes exist for different purposes but that doesn't mean that ETFs exist that follow those indexes, let alone USD ETFs. For your purposes sure you can look at any indexes you are interested in just remember you'd still need to find a corresponding USD ETF that is following the index.

SRI ETF = social responsible index exchange trade fund

You may already know this, just keep in mind these indexes that measure "SRI", or climate change, or concepts like that will measure this stuff in different ways that people don't always agree with. For example the MSCI World SRI Index you linked has TESLA as one of its top investments, many would argue that Tesla/Elon Musk are not compatible with the idea of SRI.