Introducing Search My Fund: A New Investment Fund Analysis Tool

By Richard Howard

“Knowledge is power. Knowledge shared is power multiplied” – Robert Noyce, Co-Founder of Intel (attributed)

Our vision at Green Finance Guide is to help mitigate climate change by giving individual investors the knowledge and power to evaluate their own investment decisions.

This is especially important when it comes to investment funds, where it is often difficult to dissect their underlying holdings and find out where your money is going.

During our initial attempts at improving financial transparency of investment funds we quickly realised that a more robust technological solution would be required, since there is no standard way of displaying the investment holdings.

As a result we pivoted towards a new investment analysis tool: Search My Fund.

This tool enables users to search all the holdings in a particular fund, enabling them to see where their money is going. The tool is still a work in progress, but we thought it was important to show you what we are up to and importantly get your feedback.

Why do we need this tool?

As we have explored in many previous blogs, creating a truly climate-friendly investment portfolio is an incredibly difficult thing to do. Fossil fuels and CO2 emissions are so embedded in our daily lives that having completely fossil-free and environmentally-friendly investments is no easy task.

Of course it is possible to exclude investments in oil and gas companies or other polluting industries, but the tricky bit will come once we move beyond simple fossil fuel divestment strategies.

Soon there will be a burgeoning complexity of different environmental (and economic) aims competing for our investment cash. Electric heating and hydrogen, green steel and timber buildings, electric planes and bio-jet fuel, cobalt-free batteries and battery recycling? Old markets dominated by a single technology are going to be carved up, and clarity about who owns and does what will be key.

Furthermore, as large publicly-traded companies are starting to pivot towards a greener future (e.g. Volkswagen AG and electric cars [1], BP Plc and renewable energy [2]) the boundaries between high emitting companies and climate-tech ones will become increasingly blurred.

Keeping tabs on those changes is going to be difficult enough for a fund manager – who looks after several funds day-in day-out. Imagine how difficult it will be for an individual investor who invests across many different funds and only checks those funds once a year.

Search My Fund is looking to be ahead of the game and start building a range of data tools to track the coming changes. Furthermore, we want to start to disseminate that information now.

Technical Challenges

It is currently very difficult for a non-professional investor to easily scrutinise a fund for holdings that do or do not fit their investment values. Many funds will only release this data periodically, as they have to by regulations, every 6 months – in their annual or semi-annual reports, and this information can be buried deep within several hundred PDF pages of technical documentation and accounts.

Therefore, we have designed some custom software – supported by machine learning – to log each investment fund’s holdings. That information is then clearly displayed on our easily searchable website.

This means that all the data is in a single location and allows the individual investor to quickly find the data they want.

Future Outlook

The version you see today is a BETA version.

We are still adding data and functionality to the site all the time. By improving our database we will improve the machine learning algorithms, which as a result will improve the data collection tool.

And with more data we will be able to create better and better features to support our vision of financial transparency and mitigation of climate change by tying our holding data to more and more ESG (environmental, social and governmental) data sources. So please be patient.

We encourage you to look at the new tool [link] and give us your feedback either via email or via Twitter.

References

  1. https://www.businessinsider.com/vw-making-huge-bet-on-electric-vehicles-in-next-decade-2019-11?r=US&IR=T
  2. https://www.wsj.com/articles/bp-bets-future-on-green-energy-but-investors-remain-wary-11601402304

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