The Sphere 500 Climate Fund (SPFFX) celebrates its one-year anniversary

October 27, 2022
Shlomo Bernartzi

I am proud to share that the Sphere 500 Climate Fund (SPFFX) has been helping investors save for retirement while taking action on climate for a full year. SPFFX invests in the biggest 500 companies in the US, minus the fossil fuel companies in that list. When the fund votes on behalf of its investors on shareholder proposals, it votes for climate action, rather than the status quo. We believe this approach is best for our investors’ bottom line, and also happens to help the planet.

Russia invaded Ukraine, sending oil prices sky-high - but that didn’t stop our investors

We could not have predicted that Russia would invade Ukraine, sending oil prices up. But investors have continued to demonstrate that investing with their values matters to them, regardless of whether that means taking short-term losses. We have not had a single investor sell their SPFFX holdings. 

When it comes to retirement investing, long-term growth fuels the compounding interest that makes it possible to retire in comfort, and investors have shown that they understand the power of sticking to a strategy for the long-run. 

While we do not recommend trying to time the market when buying into a fund (dollar-cost averaging is considered by many to be the best way to ensure you get started investing rather than wait on the sidelines), for those looking to sell holdings in an S&P 500-type index to invest in a climate-friendly strategy, now could be a beneficial time to do so.

Data has shown that removing fossil fuels from investments can improve returns

Eliminating a sector or industry from an investment portfolio can help improve the overall return of a portfolio while reducing its volatility over time, leading to greater retirement savings for investors.

A study by the NYU Center for Sustainable Business reviewing 59 studies about the performance of climate-focused funds found that 43% showed a positive correlation between climate focus and performance, and only 14% showed a negative correlation.  

A comparison of the Sphere index's performance to the S&P 500 showed improved performance with the removal of fossil fuel companies. 

Excluding the fossil fuel industry from portfolios also protects investors from stranded asset risk — the risk that public pressure and regulations will require oil, gas, and coal companies to “leave it in the ground,” resulting in a devaluation of the key assets on the companies’ balance sheets and a loss of value of the shares in those companies. 

The Sphere 500 Climate Fund (SPFFX) offers a simple and transparent approach to climate-friendly investing

SPFFX invests in the biggest 500 companies in the US, and removes the fossil fuel companies from that list. 

A lot of people don’t realize investment funds vote their shares in the companies they invest in. Instead of rubber-stamping board recommendations, SPFFX votes for the planet, following the recommendations of a climate-focused shareholder advocacy nonprofit called As You Sow

Because the SPFFX investment approach is rules-based and not actively managed by an investment manager — i.e. it tracks a rules-based index — it can be affordable. Its all-in fees are 0.07%. 

It's time to celebrate our accomplishments

In our first year, we have built partnerships and become available on a number of 401(k) and brokerage platforms, including Vanguard, Pershing, Ascensus, MidAtlantic, Matrix, Vestwell, Human Interest, LeafHouse, and Carbon Collective. We’re working hard to become available everywhere. 

We have gone live on a number of 401(k) and 403(b) retirement plans, with company leaders and employees requesting to add us to more retirement plan lineups every day. 

In addition to retirement plans, a growing number of private investors have moved their investments into SPFFX, joining early investors Clay Rockefeller, great-great-grandson of John D. Rockefeller, and Eliot Horowitz, co-founder of tech unicorn MongoDB, in choosing climate-friendly investing with Sphere.

Here’s how you can help make climate-friendly investing available to everyone

If we stay on on our current climate trajectory, we have six years and nine months left until we reach 1.5°C of warming, the point that the international scientific community highly recommends we stay below. We don’t have time to waste. Here’s how you can help change that trajectory.

Start by telling the gatekeepers at financial platforms that you want good climate-friendly investment solutions today. You can point them to helpful resources like fossilfreefunds.org and the SPFFX fund description to get them started looking at solutions. We are always happy to get on the phone to share more as well - you can reach us at hello@oursphere.org.

If you are a customer of a financial platform that does not offer SPFFX or other good climate-friendly investing options, tweet at them, submit a message to their customer service teams, or have your financial advisor get in touch with them. Show them the data that shows that fossil-free options can perform well over the long-run. If they hear from enough of us, they’ll start listening.