A new year, another portfolio rule and two new sustainable funds.
Welcome to 2025! Fun fact, 2025 is considered a “square” year since it is the square of 45 (45 × 45). I bet you never thought you’d get a math-related fact from me, let alone a fun one!
I saw a lot more green last year since my portfolio generally did well in 2024, but that was mostly due to only rarely checking my balance. The less I looked at my portfolio, the better it performed. After election results were announced, I peeked at my Charles Schwab brokerage account and saw I was profiting from the outcome. This unfortunate aspect of investing is always in the back of my mind as I reinforce why I maintain a sustainable approach instead of giving more money to large, harmful corporations.
As of December 27, 2024, only one of my holdings is in the red over the long term: the VanEck Biotech ETF (BBH), down 2.6% since being added to my portfolio in early 2023. My best performer is the Tortoise Global Water ESG ETF (TBLU), up 17.6%. This fund used to be the Ecofin Global Water ESG ETF (EBLU), but has since changed its name and ticker symbol. It was one of the first exchange-traded funds (ETFs) I bought back in March 2022 when I started this sustainable portfolio, making it my oldest current holding. Here’s a closer look at what it invests in:
Source: Tortoise Capital.
Unfortunately, the platform I use to grade my holdings on sustainability, As You Sow, gives Tortoise Global Water a D for fossil fuels and gender equality, disqualifying it from my portfolio. At least I’ll be selling this one on a gain!
The rest of my ETFs still have mostly A’s and B’s. The Schwab U.S. REIT ETF (SCHH) has a gender equality grade of C, which still qualifies for my portfolio. My latest addition, the Amplify Etho Climate Leadership U.S. ETF (ETHO), has performed well but grades D for gender equality. If this doesn’t improve by midyear, it will be my next deletion.
To avoid too much turnover, I’m adding a rule to my investing strategy. Since gender equality is the most difficult grade for sustainable funds to earn, instead of removing a holding when only its gender equality grade slips to D, there will now be a formal probationary period of six months for this grade to improve (accounting for the time between my reviews). The rest of the grades—fossil fuels, deforestation, civilian firearms, military weapons, the prison industrial complex and tobacco—should remain at A or B, with a drop to C qualifying them for deletion.
During my last portfolio review, I determined that I wanted to add another holding to the mix to bring my portfolio back to six ETFs for diversification purposes. On my search for a new ETF or two for my portfolio, I went with my tried and true process. I began on As You Sow, filtering first by a gender equality grade of C or higher, then adding grades of B or higher for the rest of the criteria.
A few funds focused on weight loss drugs caught my eye, specifically the Amplify Weight Loss Drug & Treatment ETF (THNR) and the Roundhill GLP-1 & Weight Loss ETF (OZEM). I know these drugs are poppin’ off, and I’m glad those who have struggled to lose weight finally have something that works. But I’m still not clear on their sustainability for the long term. I’m not a huge fan of pharmaceutical companies either, or the advantages they take with people’s lives. Both ETFs were recently incepted in May 2024, so they don’t have much performance data to analyze. They might be better candidates in the future!
Instead, I stumbled on two other ETFs that fit my strategy: the Vert Global Sustainable Real Estate ETF (VGSR) and the AXS Change Finance ESG ETF (CHGX). Vert Global Sustainable Real Estate has an expense ratio of 0.45%, below my threshold of 0.60%. Though it has an expense ratio grade of C compared to its peers, I have noticed this with many of my past holdings. Ultimately, the expense ratio itself is more important. Sustainable funds are going to cost a little more than their peers, that’s part of the deal! AXS Change Finance also has a grade of C for a slightly higher expense ratio of 0.49%. Vert Global Sustainable Real Estate has favorable recent and long-term performance, while AXS Change Finance’s performance grades aren’t as hot compared to its large blend category.
On the sustainability side, Vert Global Sustainable Real Estate has all A grades on As You Sow save for its gender equality grade of B—I’ll take it! AXS Change Finance has a mix of A’s and B’s, with a C for gender equality. I’ll be keeping an eye on that one, but I’m thrilled that I was able to find these funds for my portfolio. The process has become less grueling over the years, partly because I have figured out what to look for, but also due to sustainability becoming more embedded in the finance industry.
Next time, I plan to update you on my retirement accounts (yes, plural!) and net worth. More good news to come!
Wishing you all a prosperous 2025!
Explore this topic:
A Look at Top Gender Equality Funds
I read this so you don’t have to! Financial Feminist by Tori Dunlap
A (Very) Brief History of Women in Finance
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Anine, glad you were able to find replacement ETFs. I was curious about why it’s so hard to find ESG ETFs that score well on the gender equality score, so I pulled up the report that the As You Sow score is based on: Equileap’s Gender Equality Report & Ranking 2024, developed markets edition. Overall, the average score rose from 41% in 2023 to 44% in 2024. But the report noted “resistance to diversity, equity, and inclusion (DEI) data in the U.S,” and says that “economic uncertainty prompts some companies to deemphasize data and analytics in their DEI efforts.” So it could partially be a data collection issue. But, still, it’s alarming to see how few companies are achieving gender balance or working to eliminate the pay gap. Just hope the score continues to rise in 2025. Oh, and I do see a TBLU page on AAII.com today – must have been one of those temporary glitches! 😉
Jean, thank you so much for this! I have heard many companies are removing their DEI practices recently, including health care companies. This backpedaling creates even more uncertainty for people who were previously protected, even by something that might have been mostly performative. And this information comes from people who work in HR at these companies. I’m seeing Tortoise Global Water on AAII.com now, glad it’s back up! It wasn’t showing up in My Portfolio either, so I thought it was done for! I’ll update the post to reflect that :).