Digital Banking Demo

In 2020 returns on sustainable investment strategies as a whole have been comparable to, or even outperformed, traditional counterparts.

Sustainability is playing a bigger role in the global economy. The EU Recovery Plan will allocate 30% of its EUR 1.8trn budget to climate-related investments. US presidential nominee Joe Biden has outlined a USD 2trn climate spending plan. And China has announced a pledge to be carbon neutral by 2060.

Given this weight of support, it's perhaps no surprise that so far in 2020, returns on sustainable investment strategies as a whole have been comparable to, or even outperformed, traditional counterparts. Here at UBS, we've made sustainable investing our preferred solution for private clients looking to invest globally.

There's plenty of ways investors can buy into the increasingly fast-growing sustainability market.

Here's three that we highlight.

1. Diversified sustainable portfolios.

It's now possible to build a diversified portfolio of fully sustainable investments across asset classes. Different SI approaches and instruments have varying style, region, or market-cap tilts that drive differences in performance across the economic cycle. As a result, it's possible to invest in a diversified way to earn attractive risk-adjusted returns through the cycle, while investing for good.

2. Replacing traditional with sustainable.

Green bonds as a whole have proven to be more defensive during drawdowns than broad investment grade corporate bonds. But they also have an additional benefit; their proceeds are used to fund projects related to addressing environmental challenges. The EU, for example, is set to be largest issuer of green bonds in the coming years at EUR 225bn.

3. Investing in longer-term themes.

The European Green Deal aims to transform the EU from a high- to a low-carbon economy. That favors a thematic approach to investing, directing capital to companies that support those efforts. Our clean air and carbon reduction longer-term investment theme identifies companies that stand to benefit from not just the EU's push, but also the global push toward sustainability.