Direct investments that measurably protect the climate
The Commerzbank subsidiary Commerz Real is pursuing very big goals with its Klimavest fund, which it launched in October 2020: According to the advertising, it creates “the bridge between private capital, the chance of attractive returns and a measurable impact for everyone. “Because it should invest directly in projects with an“ impact ”, that is, a positive ecological effect, and thus grant private investors access to sustainable material assets.
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Fund has, among other things, several wind parks
10 billion euros from investors are to flow into projects for renewable energies, sustainable infrastructure, mobility and forestry with a total volume including loans of at least 25 billion euros. In November 2020, the fund already owned wind turbines in Heinsberg, Beckum, Freienwalde and Langenrieth in Germany as well as in Boarp, Rosenskog and Dallebo in Sweden, a solar park in Tordesillas in Spain and three green bonds.
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There may be delays in the return
Fund investors can redeem units below EUR 500,000 each day. Investments like wind farms are not easy to trade. The fund management cannot sell them overnight if many fund investors want to get out. Therefore, the Klimavest has a special legal form and is subject to special rules. It is a “European Long-Term Investment Fund” (ELTIF), (Isin LU 218 393 900 3). According to the regulation of the European Parliament and of the Council on European long-term investment funds, investors may invest a maximum of 10 percent of the assets that are available to them for financial investments. They have to invest at least 10,000 euros in shares in the Klimavest. There may be a delay in the return. It is unclear whether the fund shares will also be traded on a stock exchange.
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Calculator for carbon offset
“Generate a return and at the same time offset your personal CO2 footprint,” says Commerz Real. Each investment of 10,000 euros should help to save as much CO2 as one hectare of beech forest saves a year. With a computer on the website of Klimavest can be estimated how big your own CO2 footprint is and how high the installation in the Klimavest would have to be to compensate for it. Loud Federal Environment Agency, the average footprint in Germany is a good 11 tons per year and person. In order to compensate for the 11 tons, an investor would have to put around 30,000 euros into the climate heap.
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Climate protection through funds is not cheap
However, doing climate protection in this way is not exactly cheap. An issue surcharge of up to 5 percent and very high running costs, many of which are independent of success, reduce the return by 3.42 percentage points annually over a five-year holding period. For investors, the optimistic forecast according to the key information sheet leaves 2.54 percent per year, in the stress scenario minus 0.23 percent. The shorter the assumed holding period, the greater the impact on the costs.
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Not all costs taken into account
The total costs indicated relate only to the costs at fund level, they do not include the operational costs at the level of the respective projects. These include, for example, costs for operating the systems such as fees under full maintenance contracts and operating fees. “If they were included, the total expense ratio would be higher,” says Axel Seider, product developer at Commerz Real.
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Loans make up more than 30 percent
Over a third of the 52 pages of investor information – the “investment memorandum” – take the risks. Example: ELTIFs are only allowed to take out 30 percent credit themselves. Financing at project level is not taken into account as long as the fund is not liable for it. In the case of the Klimavest, investments such as wind farms can therefore be financed more externally.
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Loans increase the risk
“The amount of credit that we would like to take depends, for example, on whether and for how long a state feed-in tariff is flowing,” explains Heiko Szczodrowski, Head of Portfolio Management at Commerz Real. At the top, that’s currently 65 percent for a project. Across the entire fund, an average of 60 percent debt capital is sought. He points out that there is therefore no obligation to make additional contributions to the fund. However, loans increase the risk, regardless of who specifically borrows them. The fund may invest in Commerzbank products, which could give rise to conflicts of interest.
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The costs are very high
Because of the overall very high costs and high levels of credit, little speaks in favor of the Klimavest fund. If you are interested in sustainable investments, you will find more offers with our comparison Ethical-ecological funds and ETF. Ways to The Stiftung Warentest also examined CO2 compensation.
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