Assessing the Circular Economy Funds: Performance, Fees, Risks, and Sustainability
Abstract
:1. Introduction
2. Methodology and Data
3. Discussion and Data Analysis
3.1. CE Mutual Funds
3.1.1. Key Information
3.1.2. Risks, Returns, and Fees
3.1.3. Sustainability
3.2. CE ETFs
3.2.1. Key Information
3.2.2. Risks, Returns, and Fees
3.2.3. Sustainability
4. Private Equity and Venture Capital Funds
5. Conclusions
Author Contributions
Funding
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
Appendix A
Panel A CE Mutual Funds | |||||||||
---|---|---|---|---|---|---|---|---|---|
BGF CE Fund (as of 31 August 2023) | Candriam CE Fund (as of 31 May 2023) | RobecoSAM CE Fund (as of 31 October 2023) | Decalia CE Fund (as of 31 May 2023) | Anima CE Fund (as of 31 May 2023) | |||||
United States | 47.73% | United States | 61.05% | United States | 55.87% | United States | 65.89% | Emerging market | 3.87% |
Eurozone | 24.69% | Eurozone | 13.84% | Eurozone | 18.52% | Eurozone | 16.11% | Eurozone | 3.18% |
Europe, ex Euro | 10.31% | Europe, ex Euro | 9.56% | United Kingdom | 8.83% | Europe, ex Euro | 9.76% | Asia, emerging | 3.03% |
Japan | 5.73% | United Kingdom | 3.71% | Europe, ex Euro | 7.42% | Japan | 3.78% | United States | 2.81% |
Australasia | 4.80% | Canada | 3.15% | Latin America | 2.24% | United Kingdom | 1.21% | Asia, developed | 2.29% |
Other | 3.68% | Other | 5.63% | Other | 4.86% | Other | 4.58% | ||
Panel B CE ETFs | |||||||||
BNPP CE ETF (as of 31 October 2023) | |||||||||
United States | 59.40% | ||||||||
Eurozone | 18.92% | ||||||||
Japan | 11.41% | ||||||||
UK | 4.30% | ||||||||
Europe-ex Euro | 3.81% | ||||||||
Other | 2.08% |
Panel A CE Mutual Funds | |||||||||
---|---|---|---|---|---|---|---|---|---|
BGF CE Fund (as of 31 August 2023) | Candriam CE Fund (as of 31 May 2023) | RobecoSAM CE Fund (as of 31 October 2023) | Decalia CE Fund (as of 31 May 2023) | Anima CE Fund (as of 31 May 2023) | |||||
Industrials | 32.40% | Industrials | 24.02% | Industrials | 43.46 % | Industrials | 22.97% | Technology | 3.09% |
Consumer cyclical | 17.85% | Technology | 22.29% | Technology | 15.73% | Technology | 26.57% | Financial services | 2.63% |
Technology | 15.21% | Consumer defensive | 18.34% | Consumer cyclical | 14.27% | Healthcare | 10.52% | Consumer cyclical | 2.25% |
Basic materials | 15.20% | Consumer cyclical | 13.98% | Healthcare | 7.82% | Consumer defensive | 10.02% | Industrials | 1.58% |
Consumer defensive | 11.04% | Basic Materials | 8.14% | Consumer defensive | 5.21% | Financial services | 6.07% | Healthcare | 1.43% |
Other | 5.23% | Other | 8.32% | Other | 9.01% | Other | 20.62% | Other | 4.67% |
Panel B CE ETFs | |||||||||
BNPP CE ETF (as of 31 October 2023) | VanEck CE ETF (as of 27 December 2023) | Rize CE ETF (as of 27 December 2023) | |||||||
Technology | 22.48% | Industrials | 62.30% | Industrials | 37.51% | ||||
Industrials | 21.99% | Basic materials | 18.08% | Consumer cyclical | 29.94% | ||||
Consumer defensive | 19.87% | Consumer cyclical | 10.70% | Basic materials | 12.80% | ||||
Basic materials | 16.72% | Consumer defensive | 4.67% | Technology | 12.66% | ||||
Consumer cyclical | 14.89% | Utilities | 4.20% | Consumer defensive | 3.84% | ||||
Other | 3.88% | Other | 3.25% |
Panel A CE Mutual Funds | ||||
---|---|---|---|---|
BGF CE Fund | Candriam CE Fund | RobecoSAM CE Fund | Decalia CE Fund | Anima CE Fund |
Microsoft Corp. (4.32%) | Waste Management Inc. (4.25%) | Compass Group PLC (3.00%) | Microsoft Corp. (4.72%) | TRS-LONG-CTP_446-TIT NE728919VT48 Index (−53.35%) |
Republic Services Inc. (3.94%) | American Water Works Company Inc. (3.47%) | EssilorLuxottica SA (2.87%) | Alphabet Inc. (4.00%) | ANIMA Star High Potential Europe I (8.89%) |
Coca-Cola Europacific Partners PLC (3.68%) | Darling Ingredients Inc. (3.38%) | Relx PLC (2.70%) | Cisco Systems Inc. (3.23%) | Anima Obbligazionario Emergente Y (8.85%) |
VEOLIA Environment SA (3.60%) | Nestle SA (3.15%) | Wolters Kluwer (2.68%) | Adobe Inc. (2.91%) | Anima Obbligazionario High Yield Y (6.71%) |
Ecolab Inc. (3.07%) | Graphic Packaging Holding Co. (2.94%) | Clean Harbors Inc. (2.54%) | Salesforce Inc. (2.66%) | Anima Emergenti Y (5.90%) |
Xylem Inc. (3.05%) | Ecolab Inc. (2.79%) | Xylem Inc. (2.51%) | Hoya Corp. (2.46%) | Anima Obbligazionario Flessibile F (5.65%) |
UPM Kymmene Oyi (2.99%) | Procter & Gamble Co. (2.78%) | NVIDIA Corp. (2.49%) | Autodesk Inc. (2.42%) | ANIMA Global Macro I EUR (5.44%) |
SIG Group AG (2.99%) | Unilever PLC (2.76%) | Quanta Services Inc. (2.47%) | Novo Nordisk A/S Class B (2.37%) | Anima Sforzesco F (4.10%) |
CRH PLC (2.98%) | Microsoft Corp. (2.66%) | Tetra Tech Inc. (2.47%) | Danaher Corp. (2.27%) | United States Treasury Notes (3.51%) |
Avery Dennison Corp (2.96) | Crown Holdings Inc. (2.57%) | AECOM (2.34%) | S&P Global Inc. (2.23%) | Anima Pacifico F (3.34%) |
Panel B CE ETFs | ||||
BNPP CE ETF | VanEck CE ETF | Rize CE ETF | ||
International Business Machines Corp. (2.43%) | Waster Connections Inc. (7.93%) | Carmax Inc. (4.61%) | ||
Intel Corp. (2.40%) | Waste Management Inc. (7.62%) | Cintas Corp. (4.56%) | ||
UPM Kymmene Oyj (2.37%) | UPM-Kymmene Qyj (6.73%) | Herc Holdings Inc. (4.42%) | ||
Relx PLC (2.35%) | Republic Services Inc. (6.61%) | Kurita Water Industrails Ltd. (4.37%) | ||
TJX Companies Inc. (2.34%) | Veralto Corp. (6.14%) | ANSYS Inc. (4.31%) | ||
Cisco Systems Inc. (2.32%) | Brambles Ltd. (5.42%) | Badger Meter Inc. (4.27%) | ||
Adobe Inc. (2.30%) | Smurfit Kappa Group PLC (5.00%) | Ashtead Group PLC (4.16%) | ||
Linda PLC (2.26%) | GFL Environmental Inc. (4.89%) | Trex Company Inc. (4.16%) | ||
Colgate-Palmolive Co. (2.24%) | Darling Ingredients Inc. (4.67%) | Ball Corp (4.15%) | ||
Hitachi Ltd. (2.22%) | Umicore NV/SA Shares (4.57%) | Dassault Systemes SE (4.08%) |
Fund Name | Net Return | Information Ratio | Sharpe Ratio | Standard Deviation | ||
---|---|---|---|---|---|---|
CE Mutual Funds | ||||||
BGF CE Fund | 9.03% | −4.40% | 0.94 | −1.08 | −0.38 | 9.02% |
Candriam CE Fund | −0.13% | −13.18% | 1.06 | −2.95 | −1.03 | 11.05% |
RobecoSAM CE Fund | 13.66% | −2.25% | 1.05 | −0.42 | −0.05 | 11.35% |
Decalia CE Fund | 7.21% | −8.67% | 1.08 | −2.62 | −0.61 | 11.16% |
Anima CE Fund | 1.61% | - | - | - | - | - |
CE ETFs | ||||||
BNPP CE ETF | 16.12% | −0.40% | 1.06 | −0.05 | 0.12 | 10.97% |
VanEck CE ETF | −5.40% | −19.48% | 0.84 | −4.24 | −2.67 | 7.15% |
Fund Name | Type | Inception Date | Domicile |
---|---|---|---|
Closed Loop Venture Fund | VC | 2017 | US |
Closed Loop Leadership Fund | PE (closed) | 2019 | US |
Circular Innovation Fund | VC | 21 April 2022 | Canada |
Circulate Capital Ocean Fund I-B | PE | 2021 | US |
Taaleri Circular Economy Fund | PE (closed) | 03/2016 | Finland |
Future of Plastics Fund | VC | 2022 | UK |
Circularity Capital | PE | 2015 | UK |
Closed Loop Venture Fund | Closed Loop Leadership Fund | CIF | Circulate Capital Ocean Fund | Taaleri Circular Economy Fund | Future of Plastics Fund | Circularity Capital | ||
---|---|---|---|---|---|---|---|---|
Accelerated Filtration | Easy Aerial | Rebound Technologies | Apkudo | Closed Loop Partners | Lucro Plastecycle Private Limited | Chempolis | Greyparrot | Bike Club |
Algaeing | Evrnu | Rebundle | Balcones Resources | European Circular Bioeconomy Fund | Nepra Resource Management Pvt Ltd. | Lämpöhuolto Group | REBIKE | |
Algramo | Fillogic | Retrievr | ERI | Lizee | Srichakra Polyplast Pvt Ltd. | Smartvatten | Cocogreen | |
AMP Robotics | For Days | SOLARCYCLE, Inc. | Single Stream Recyclers | Evoco LTD | Rapidue Technologies (Recykal) | Naps Solar | Lendis | |
Ansa | HomeBiogas | The Renewal Workshop | Sims Municipal Recycling | Ricron Panels Pvt Ltd. | Wastewise Group | P2i | ||
Atlas Organics | Hyran | Thrilling | Dalmia Polypro Industries | Touchpoint | ZigZag | |||
By Rotation | LOLIWARE | Thrive Lot | ACE Green Recycling | Volter | Winnow | |||
CoLoadX | Molg | TradeLanes | Reciki | OptiWatti (already exited) | Grover | |||
Dai | Mori (Combridge Crops) | ucrop.it | Prevented Ocean Plastic Southeast Asia | Ecomation (already exited) | Green Home Group | |||
Dimpora | Natural Machines | VALIS | Deluxe Recycling Private Limited | Shark Solutions | ||||
Earthodic | Partsimony | Tridi Oasis | PackBenefit | |||||
Advanced Clothing Solutions | ||||||||
CERAFILTEC | ||||||||
CEMAsys |
1 | See https://www.un.org/sites/un2.un.org/files/circular_economy_14_march.pdf, accessed on 10 January 2024. |
2 | For example, Althelia Sustainable Ocean Fund, a private equity fund, has a blended portfolio of sustainable seafood, CE, and conservation-focused businesses. Even though it invests in CE, it also invests in other areas. Therefore, it was not included in the discussion of our article. For a list of funds with investments including, but not limited to, CE, please refer to Table 17 of Lawlor and Spratt (2021). |
3 | See the 2023 Investment Company Fact Book. |
4 | For example, the risk, return, and sustainability data of venture capital funds and private equity funds were not available and therefore were not included in our study. |
5 | Morningstar’s (overall) rating for funds, often called the star rating, is a measure of a fund’s risk-adjusted return relative to similar funds. The rating ranges from one to five stars, with five stars indicating the top financial performers. |
6 | The MSCI ACWI Index (EUR) captures large and mid-cap representation across 23 developed markets and 24 emerging Markets countries. With 2946 constituents, the index covers approximately 85% of the global investable equity opportunity set. See MSCI ACWI Index (EUR) Factsheets, https://www.msci.com/documents/10199/1ee87397-6313-4f46-87ae-6761f666558e, accessed on 2 January 2024. |
7 | The constituents of the MSCI World Index (EUR) are the same as the ones in the MSCI World Index (USD), only in different currencies. See the MSCI World Index (EUR) Factsheets, https://www.msci.com/documents/10199/890dd84d-3750-4656-87f2-1229ed5a5d6e, accessed on 3 December 2023. |
8 | The MSCI World Index captures large and mid-cap representation across 23 developed markets. With about 1509 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. See the MSCI World Index (USD) Factsheets, https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb, accessed on 2 January 2024. |
9 | The Morningstar sustainability rating, which is known as the globe rating, “was designed to be a reliable, objective way to evaluate how investments meet environmental, social, and governance (ESG) challenges,” with five globes indicating the most sustainable funds. |
10 | According to Morningstar, the low-carbon designation is “an indicator that the portfolio’s holdings overall are in general alignment with the transition to a low-carbon economy” and “is intended to allow investors to easily identify low-carbon funds across the global universe.” |
11 | “This index measures the performance of large- and mid-cap growth stocks listed in developed and emerging countries around the world. These stocks represent the more growth-oriented half of the parent benchmark, the Morningstar Global TME Index, and are weighted by float-adjusted market capitalization. This Index does not incorporate Environmental, Social, or Governance (ESG) criteria.” Please see https://indexes.morningstar.com/indexes/details/morningstar-global-growth-target-market-exposure-FS0000H8UV?currency=USD&variant=NR&tab=overview, accessed on 2 January 2024. |
12 | “The MVIS Global Circular Economy ESG Index (MVCIRC) tracks the performance of companies contributing to the circular economy. This includes water purification and treatment products/services, waste-to-energy and biofuels, waste management services that include recycling services, and metal recycling services. MVCIRC covers at least 90% of the investable universe.” Please see https://www.marketvector.com/indexes/sector/mvis-global-circular-economy-esg, accessed on 2 January 2024. |
13 | The CE mutual funds and ETFs that are rated as low-carbon funds were all founded before 2020. |
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Fund Name | Type | Inception Date | Domicile | Size (Millions) | Style | Morningstar Rating |
---|---|---|---|---|---|---|
BGF CE Fund | Equity | 2 October 2019 | Luxembourg | $1516 | Large, growth | ★★★ |
Candriam CE Fund | Equity | 27 April 2020 | Luxembourg | $418 | Mid, blend | ★★★ |
RobecoSAM CE Fund | Equity | 22 January 2020 | Luxembourg | $238 | Mid, growth | ★★★★ |
Decalia CE Fund | Equity | 30 May 2018 | Luxembourg | $43 | Large, growth | ★★ |
Anima CE Fund | Bond | 2 January 2020 | Italy | $395 | Large, blend | —— |
Fund Name | Net Return | Expense Ratio | Information Ratio | Sharpe Ratio | Standard Deviation | ||
---|---|---|---|---|---|---|---|
BGF CE Fund | 1.62% | 1.81% | −6.51% | 1.09 | −0.91 | 0.00 | 14.74% |
Candriam CE Fund | −1.60% | 1.94% | −8.87% | 1.09 | −1.40 | −0.17 | 13.90% |
RobecoSAM CE Fund | 5.27% | 0.93% | −3.02% | 1.06 | −0.53 | 0.26 | 13.01% |
Decalia CE Fund | −0.37% | 1.40% | −9.24% | 1.20 | −1.51 | 0.15 | 15.04% |
Anima CE Fund | −3.30% | 1.36% | - | - | - | - | - |
Morningstar Sustainability (Globe) Rating | Morningstar Sustainable Investment | Morningstar Low-Carbon Designation | |
---|---|---|---|
BGF CE Fund | Yes | ||
Candriam CE Fund | Yes | ||
RobecoSAM CE Fund | Yes | ||
Decalia CE Fund | Yes | ||
Anima CE Fund | No | No Designation |
Fund Name | Type | Inception Date | Domicile | Underlying Index | Size (Millions) | Style | Morningstar Rating |
---|---|---|---|---|---|---|---|
BNPP CE ETF | Equity | 24 April 2019 | Luxembourg | ECPI CE Leaders Equity Index | $943 | Large, blend | ★★★★★ |
VanEck CE ETF | Equity | 21 October 2022 | Ireland | MVIS Global CE ESG Index | $6 | Mid, blend | —— |
Rize CE ETF | Equity | 24 May 2023 | Ireland | Foxberry SMS CE Enablers Index | $2 | Mid, blend | —— |
ETF Name | Net Return | Expense Ratio | Information Ratio | Sharpe Ratio | Standard Deviation | ||
---|---|---|---|---|---|---|---|
BNPP CE ETF | 10.84% | 0.30% | 1.65% | 1.09 | 0.33 | 0.62 | 13.28% |
Morningstar Sustainability (Globe) Rating | Morningstar Sustainable Investment | Morningstar Low-Carbon Designation | |
---|---|---|---|
BNPP CE ETF | Yes | ||
VanEck CE ETF | Yes | No designation | |
Rize CE ETF | —— | —— | No designation |
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Fang, F.; Parida, S. Assessing the Circular Economy Funds: Performance, Fees, Risks, and Sustainability. Int. J. Financial Stud. 2024, 12, 40. https://doi.org/10.3390/ijfs12020040
Fang F, Parida S. Assessing the Circular Economy Funds: Performance, Fees, Risks, and Sustainability. International Journal of Financial Studies. 2024; 12(2):40. https://doi.org/10.3390/ijfs12020040
Chicago/Turabian StyleFang, Fei, and Sitikantha Parida. 2024. "Assessing the Circular Economy Funds: Performance, Fees, Risks, and Sustainability" International Journal of Financial Studies 12, no. 2: 40. https://doi.org/10.3390/ijfs12020040