A Major New Index Fund Should Unnerve Climate-Skeptical CEOs | Hacker News Reader

A Major New Index Fund Should Unnerve Climate-Skeptical CEOs

theatlantic.com

23 pointsmooreds8 comments

This has a cute type of psychological lock-in built into it thanks to capital gains tax: ETF shareholders in this are financially penalized for “changing their mind” because moving their money into other ETFs is a taxable event.

(Just an opinion. Not tax advice - I’m not an accountant.)

How does this not apply to any other financial instrument that I might buy? I buy a stock, sell it to buy another stock, tax event. Sell any ETF to buy a house, tax event. Sell mutual fund shares to buy an ETF...oh, you get the idea.

IOW, what other things makes this ETF unique amongst the gazillion other instruments I might buy with my account holdings? Because capital gains is not one of those things.

> sell mutual fund shares to buy an ETF

it's not always the case, check vanguard MF to ETF conversion for details

>ETF shareholders in this are financially penalized for “changing their mind” because moving their money into other ETFs is a taxable event

I think the point of ETFs is that big investors aren't penalized because they can trade "in-kind". They can exchange a large chunk of shares in the ETF for approximately the portfolio of stocks it corresponds to. Or vice versa.

What an interesting idea.

It isn't clear to me, though, what they are voting for. On their website (at https://etf.engine1.com) they say "Strategically hold companies and leadership teams accountable while focusing on environmental, social, and governance issues that create value."

I'm down with the environmental issues. If "social" is code for wokism, though, I want nothing to do with it.

It can have a variety of meanings, eg no slave or child labour, safe working conditions etc.

In the past we've seen a green investment movement focused on divesting from fossil fuels. There's an argument against this that divesting does nothing to actually reduce emissions.

This approach - being activist investors instead of divesting - seems much more likely to actually generate results.

Ecosia as an ETF, amazing

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