I decided to start up a new thread specific to divesting from O&G (and coal), to share what I've learned and to find out what others have learned. This is a take off from a conversation that has been on and off again in the Shorting Oil thread.
After minutes of research this morning, an option for passive investors that are otherwise following the S&P 500 (as I am in a 401k), is SPYX:
SPYX | ETF Portfolio Composition - Fidelity
(Dunno if this link requires a Fidelity login or not).
Anyway, this is an ETF that starts with the S&P 500 and subtracts out companies that own fossil fuel reserves (oil, gas, coal), but not companies that have metallurgical coal reserves (steel making).
It carries a .25% management fee that is being reduced to 0.20% presently (but can end at the end of this month, or the end of October in future years). I'm not a fan of paying .25%, but I also haven't found a lower cost passive fund that accomplishes the objective. (As a comparison, the S&P 500 index fund I'm in right now is a 0.02% management fee - much more to my liking).
I've looked at this in previous years, but due to rollover 401k rules (which I'll be learning more about), haven't had access to until this summer (too young, and not willing to quit my current job to get a 401k rollover). Now it's time for me to convert badly incomplete knowledge into actual knowledge, a plan, and do something
How have you gone about divesting in your life, and what did you find particularly helpful in accomplishing that objective?
How do you define divestment from fossil fuels? (For instance - do you also include the companies that provide O&G services to the fossil fuel companies?)
The one thing I don't like about the SPYX investment strategy is that it leaves the energy sector as a really small fraction of the investment. I see a generational / historical shift in the global energy system taking place, and I see that as a source of immense wealth creation (and destruction), so an investment strategy that gets out of energy almost completely doesn't sound like a good plan.
Then again, I have a lot of exposure to that energy system sea change through TSLA, and I haven't yet found a low cost passive index fund that does get access to the new energy system.
After minutes of research this morning, an option for passive investors that are otherwise following the S&P 500 (as I am in a 401k), is SPYX:
SPYX | ETF Portfolio Composition - Fidelity
(Dunno if this link requires a Fidelity login or not).
Anyway, this is an ETF that starts with the S&P 500 and subtracts out companies that own fossil fuel reserves (oil, gas, coal), but not companies that have metallurgical coal reserves (steel making).
It carries a .25% management fee that is being reduced to 0.20% presently (but can end at the end of this month, or the end of October in future years). I'm not a fan of paying .25%, but I also haven't found a lower cost passive fund that accomplishes the objective. (As a comparison, the S&P 500 index fund I'm in right now is a 0.02% management fee - much more to my liking).
I've looked at this in previous years, but due to rollover 401k rules (which I'll be learning more about), haven't had access to until this summer (too young, and not willing to quit my current job to get a 401k rollover). Now it's time for me to convert badly incomplete knowledge into actual knowledge, a plan, and do something
How have you gone about divesting in your life, and what did you find particularly helpful in accomplishing that objective?
How do you define divestment from fossil fuels? (For instance - do you also include the companies that provide O&G services to the fossil fuel companies?)
The one thing I don't like about the SPYX investment strategy is that it leaves the energy sector as a really small fraction of the investment. I see a generational / historical shift in the global energy system taking place, and I see that as a source of immense wealth creation (and destruction), so an investment strategy that gets out of energy almost completely doesn't sound like a good plan.
Then again, I have a lot of exposure to that energy system sea change through TSLA, and I haven't yet found a low cost passive index fund that does get access to the new energy system.