The social restrictions caused by the coronavirus pandemic mean that more people than ever are now using technology to manage their money.
However, it can be easy to feel confused and overwhelmed by the sheer number of apps and products on offer – especially when they all appear to do the same thing on the face of it.
In response to demand for more guidance on how to choose between different products, Good With Money has introduced ‘need to know’ product and provider reviews.
Here we look at Clim8 Invest – a newly-launched app that enables investors (even those with zero experience) to put their money to work in solutions to climate change while aiming for a good financial return.
Mobile app Clim8 Invest, which launched in April 2021, makes it simple for anyone to invest their money in publicly-listed businesses that are actively helping to tackle the climate crisis and bring about positive change.
Investments through the app span six themes: clean energy, clean technology, sustainable food, clean water, smart mobility and recycling.
The long-term mission for Clim8 Invest is to move billions of pounds of investments into clean energy and truly green, sustainable companies. Founder and CEO Duncan Grierson told Good With Money: “Ultimately, I want hundreds of thousands of users on the platform getting good returns and feeling good about making an impact.”
Clim8 Invest is incredibly easy to use, even if you have no previous experience with investing. Download the app on your phone in a few seconds and sign up by entering your email address (currently it is only available to non-US citizens).
You will be asked what level of risk you feel comfortable with – ‘Cautious’, ‘Balanced’ or ‘Adventurous’. Click through and you’ll be shown a typical breakdown of that portfolio. This includes what percentage of your money will be put into shares, fixed income and cash investments. You’ll also see the portfolio’s performance over the previous 12 months set against a benchmark figure to put it into perspective.
You can learn more about what all this means in Clim8’s handy factsheets that include graphs, charts, and explanations of investing terms, before you go ahead.
The app is transparent about where your money will be invested, showing examples of the companies that will be in your portfolio.
Lastly, you’ll see the fees for your investment, which is currently the same across all three portfolios (see below).
Once you’ve chosen your portfolio, you’ll need to decide which account you want to hold it in – a Stocks and Shares ISA (which lets you invest up to £20,000 a year tax-free) or, if you’ve used up your ISA allowance for the year, a General Investment Accounts (GIA).
Once you’ve completed a suitability questionnaire (to ensure investing is right for your financial situation), you’ll be asked to enter your personal details and set up payment.
Sustainable investing option
Clim8 Invest will only invest in companies that are actively working to tackle climate change so you can be confident that your money is being used to make a positive impact on the environment and society at the same time as aiming for a good financial return.
Unique selling points
- Clim8 Invest is an easy way for investors of any age or level of experience to put their money exclusively into companies that are making a positive impact on climate change.
The plus points
- Simple and quick to set up – start investing in just a few minutes.
- Invest in solutions to climate change to help create a more sustainable world.
- Funds are actively managed. This means a fund manager actively chooses where to invest your money in order to meet the fund’s sustainability goals and achieve maximum returns.
- Clim8 Invest is transparent about the companies it invests in, giving detailed information on the holdings in your portfolio.
- Low minimum investment of £25.
- New features to come including being able to move existing ISAs into your Clim8 account and more detail on portfolio performance.
- Clim8 Invest is currently only available on a mobile app, so you’ll need to feel comfortable managing your investments through your phone.
- As it is newly-launched, it has yet to build up a meaningful track record. It does, however, give figures for the last 12 months based on a mixture of simulated and actual past performance of the funds in its portfolios. Its balanced portfolio has performed very well, returning 25.35 per cent. The comparative benchmark performance (50 per cent MSCI World Equities, 50 per cent Barclays Bloomberg Global Aggregate Bond) was 9.82 per cent.
Cost of use
Clim8 Invest has an annual management fee of 0.6 per cent. You will also need to pay a portfolio fee, which ranges from 0.35 to 0.50 per cent.
How do these costs compare to competitors?
Online investment platform The Big Exchange, co-founded by the Big Issue, offers a new climate fund – the MACS Fund. The platform fee is 0.25 per cent and there is an added fee to the fund manager of between 0.8 per cent and 1.8 per cent per year.
Mobile-only app tickr, which offers positive impact (but passive – learn more here) investments, charges a flat fee of £1 a month.
Risk warning: With investing, your capital is at risk. Past performance is not a reliable indicator of future performance.