"PABU tracks US large and mid-cap stocks that meet Paris Climate Agreement criteria, overweighting companies with lower carbon intensity and higher green revenue potential. The fund's structure reveals its true nature: technology dominates with NVIDIA ( NASDAQ:NVDA) commanding 10.2% of assets, making this more of a tech bet with climate screening than a diversified ESG play. The concentration extends beyond NVIDIA, with the top three holdings controlling a quarter of the entire portfolio."
"The climate screening creates a persistent performance drag that investors need to understand. Since launching in February 2022, PABU has returned roughly 51% compared to the S&P 500's 79% gain. This 28-percentage-point gap stems directly from the fund's climate criteria, which exclude high-performing energy stocks and filter out companies that don't meet Paris Agreement alignment standards. The trade-off is clear: climate alignment comes at a measurable cost to returns."
PABU selects US large- and mid-cap stocks that meet Paris Agreement criteria, overweighting firms with lower carbon intensity and higher green revenue potential. Technology dominates the portfolio, led by NVIDIA at 10.2%, and the top three holdings represent roughly a quarter of assets. Information Technology comprises 39.9% of the fund while Energy is excluded entirely. The fund’s returns depend on mega-cap tech continuing to grow while qualifying as climate-friendly via data center efficiency and renewable commitments, creating an unusual dual-risk profile. Climate screening has produced a measurable performance drag, producing lower returns versus broader US benchmarks.
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