Clim8 Review

The Clim8 robo-advisor platform was reviewed by our team. We analyzed its pros, cons, investment strategies, and more!

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Hello there!

This article will give you our honest review of one of the socially responsible investing platforms: Clim8.

Clim8 is a Robo-Advisor promoting sustainable investments. It is suitable for new investors looking for automated investing that has a positive impact on climate change.You can start investing with £25, which is a major competitive advantage compared to other robo-advisor companies, and you can set up automatic recurring payments. On the downside, the service is only accessible through a mobile application and is only available for UK residents. Additionally, the track record for the company’s performance is short as their portfolios were created in August 2020.

If you don’t know what a Robo-advisor is yet, you might find it helpful to read our Intro to Robo-Advisors to get an overview of this innovation and its main features.

That's Clim8 in a nutshell. Keep reading to know more about our Clim8 analysis.

Overview

Clim8 was founded in 2020 as the pandemic was emerging, and has managed to raise more than $18 million since then. The platform aims to simplify investing with a focus on sustainable investing in the following sectors: green energy, clean mobility, climate technology, water systems, sustainable food, and circular economy.

According to Duncan Grierson, Founder & CEO of Clim8 Invest:

“ESG is a huge distraction in the fight against climate change. Investors need a new category that does what it says on the tin – Climate Impact.”

Clim8 offers two types of products: Individual Savings Accounts (ISA) and General Investment Accounts (GIA). You can finalize your registration online through the app, but be aware that it is only available to UK residents.

Pros & Cons

Pros

  • A very low minimum amount to start investing (only £25);
  • No withdrawal and transfer fees;
  • 100% online registration;
  • Investing for a cause.

Cons

  • Not available on desktop;
  • Only available in the UK;
  • The portfolio risk type cannot be changed on the application (you have to contact them by email for a modification);
  • Withdrawal requests must be made by email and are not automated.

Platform

You should be comfortable managing your investments over a mobile application since Clim8 is currently only available through an iOS and Android app.

The management of Clim8 is actively working on improving the services offered as they are aware of the drawbacks of their platform. They intend to offer a desktop app at a later stage, make automatic withdrawal requests through the app, and enable portfolio risk adjustments without contacting customer support.

Product Offer, Portfolios, and Investment Strategy

Clim8 currently offers two products: individual savings accounts (ISAs) and general investment accounts (GIAs).

Stocks and shares Individual Savings Account (ISA)

Every fiscal year, the government allows every UK tax resident to invest up to a specific amount in an individual savings account without paying any tax on growth or income (for the current fiscal year 2022 –2023, it is £20,000).

If you have an ISA account with another service provider, you can split the tax-free allowance between the two accounts, or you can transfer the ISA account to Clim8 Invest.

General Investment Account (GIA)

If you want to invest without the tax-related restrictions of ISA accounts, GIA is a suitable product. Unlike the stocks & shares ISA, you need to report regularly and pay tax on capital gains and on any dividends.

Portfolio Structure and Holdings

For each product, Clim8 offers three portfolios: Cautious, Balanced and Adventurous. They have different asset allocations depending on your risk profile (your willingness and ability to take risk).

Portfolio allocation of each strategy

Based on your risk profile, the holdings of your portfolio will include a combination of:

  • Equity: companies shares or funds and ETFs;
  • Fixed income: green bonds, government and sustainable development banks, and fixed income funds and ETFs;
  • Alternative investments: investing in commodities, hedge funds, forestry or cryptocurrencies;
  • Cash.

Clim8 investments span six investment themes: green energy, clean mobility, climate technology, water systems, sustainable food,and circular economy. The ultimate goal is to invest with an environmental impact mission, refraining from investing in fossil fuels, tobacco, gambling, weapons, and big tech companies.

The holdings in your portfolio might include some of the securities mentioned in the below list:

Clim8 Cautious Portfolio

If you have low risk tolerance, you would generally invest in portfolios with low risk, similar to the “Cautious” portfolio, but with a greater allocation to fixed income (safer investment class).

Below chart shows the breakdown of the companies' revenues by theme of the cautious portfolio:

Clim8 Balanced Portfolio

This portfolio is suitable for investors looking for a balanced risk-reward combination. Almost half of the portfolio is allocated to equities (53%).

Clim8 Adventurous Portfolio

If you are willing to take more risks to generate higher returns, and have a greater ability to bear potential losses, you would generally be tailored towards the “Adventurous” portfolio, with a greater allocation to equities.

Clim8 Portfolios Performance

As for performance, the benchmarks used to measure the performance of the portfolios are the MSCI World Index and the Barclays Global Aggregate Bond Index, but with different weight combinations for each portfolio:

  • Cautious portfolio benchmark: 25% MSCI World Index and 75% Barclays Global Aggregate Bond Index;
  • Balanced portfolio benchmark: 50% MSCI World Index and 50% Barclays Global Aggregate Bond Index;
  • Adventurous portfolio benchmark: 75% MSCI World Index and 25% Barclays Global Aggregate Bond Index.

In the below picture, we compiled the performance of the three portfolios, since their inception in August 2020 up to February 28, 2022:

Performance of the three portfolios since inception - August 2020

Keep in mind that past performance is not indicative of future returns.

You can only have one ISA account with a single risk profile type, while you can have up to 3 General Investment Accounts (GIA).

Environmental Impact

You can easily know the environmental impact of your investment. For example, Clim8 estimates that a £1,000 investment in a balanced portfolio for 1 year, would have saved 117kg of CO2 emissions and generated 42kWh of clean electricity.

The below image shows an estimation of the environmental impact of a £1,000 investment in each of the three portfolios.

Exchange Risk

You should take into account the exchange rate risk as your holdings are spread across different geographical regions. Once you open an account with Clim8, some of your funds will be converted to EUR or USD depending on the holdings in the portfolio. This conversion increases your exposure to currency risk, as unexpected movements in exchange rates might erode or increase the profits of your investments. For example, your foreign holdings will be converted back to GBP (partially or fully) in order to execute a withdrawal request or the closure of your account.

Fees

Clim8 charges a 0.6% annual management fee. The fees are calculated and charged monthly in arrears (after providing the service).

Additionally, you will need to account for two types of costs (not generated by Clim8):

  • Portfolio costs, which range between 0.35% and 0.5%, depending on the fund management firm;
  • Market spread, which is the difference between the buying and selling price of the investment instruments.

Clim8 works on minimizing those trading costs by finding the lowest rates in the market and providing users with institutional rates.

Although the annual fees are similar to other robo-advisor companies in the UK, Clim8 does not offer tier pricing, which makes the competition a better choice for clients with large amounts. Moreover, compared to other international robo-advisors, Clim8 fees are slightly higher(ETFmatic 0.48% and Simplewealth 0.5%).

Withdrawal & Deposit fees

Clim8 does not charge any fees for withdrawals or deposits, or if you wish to transfer your funds to another provider. For partial withdrawals, a minimum of £5 must be kept in your portfolio, and the amount withdrawn should always be greater than £25.

Safety and Reliability

Clim8 Invest is an appointed representative (a firm or person who runs regulated activities and acts as an agent for a firm directly authorised by the FCA) of WealthKernel Ltd., who is the custodian (holds customer assets).

WealthKernel is authorized and regulated by the Financial Conduct Authority (FCA - FRN 723719) and is also a member of the Financial Services Compensation Scheme (FSCS). Accordingly, in the event of insolvency, your money is protected by the FCA for up to £85,000 of the amount invested via Clim8.

Customer Support

Clim8 customer support is available by phone, or you can submit your inquiry online, and they will get back to you within 24 hours. Additionally, Clim8 is active on major social media platforms like Facebook, Instagram, Twitter, and LinkedIn.

Account Opening

Clim8’s application is free to install, and you can sign up for an account directly within minutes. All you need to have is a national insurance number and a UK residency.

First, you should decide which account type you want to invest in: an Individual Savings Account (ISA) or a General Investment Account (GIA).

Then, they assess your profile suitability after asking a few questions about:

  • Your investment knowledge and experience: if you take your own investment decisions or seek financial advice before investing;
  • Your financial situation: if you have more savings than debt;
  • Your ability to bear losses: if your standard living might be affected by the performance of the portfolio and if you have enough savings to cover living expenses for 3 months;
  • Your investment objectives: the number of years you want to invest for;
  • Your perception of risk: if you are willing to take any risk or you are concerned about avoiding large losses.

Based on your answers, Clim8 will suggest a portfolio that is suitable to your profile. You can choose a portfolio other than the suggested one based on the level of risk you are comfortable with having.

After that, you will have to fill in your personal details. And to fund your account, you can use an easy bank transfer through TrueLayer, one of the UK’s leading Open Banking technology providers, or via a regular bank transfer.

You can set up a direct recurring payment where you automatically contribute to your account on a monthly basis. The deposit can range from as little as £10 to as much as £2,000 per payment. Alternatively, for a one-off deposit, you can start with £25 and there is no upper limit.

The bottom line

Clim8 is a new robo-advisor company promoting sustainable investment. It is suitable for new investors looking for automated investing that has a positive impact on climate change. You can start investing with £25, which is a major competitive advantage compared to other robo-advisor companies, and you can set up automatic recurring payments. On the downside, the service is only accessible through a mobile application and is only available for UK residents. Additionally, the track record for the company’s performance is short as their portfolios were created in August 2020. Finally, many features need to be automated in order to enhance users’ experience, like withdrawal requests and portfolio modifications.

In a nutshell, if you want to invest a large amount using robo-advisor services, you might find Clim8 Invest expensive when assessing its features compared to other companies.

Did you find this review helpful? Did it answer all your questions? Let us know your feedback in the comments below, or contact us directly!

Robo-Advisor Reviews
 /
Clim8 Invest
 Review

Clim8 Review

Tony Nasr, CFA, FRM

Hello there!

This article will give you our honest review of one of the socially responsible investing platforms: Clim8.

Clim8 is a Robo-Advisor promoting sustainable investments. It is suitable for new investors looking for automated investing that has a positive impact on climate change.You can start investing with £25, which is a major competitive advantage compared to other robo-advisor companies, and you can set up automatic recurring payments. On the downside, the service is only accessible through a mobile application and is only available for UK residents. Additionally, the track record for the company’s performance is short as their portfolios were created in August 2020.

If you don’t know what a Robo-advisor is yet, you might find it helpful to read our Intro to Robo-Advisors to get an overview of this innovation and its main features.

That's Clim8 in a nutshell. Keep reading to know more about our Clim8 analysis.

That's Clim8 in a nutshell. Keep reading to find out more about our Clim8 analysis.

Clim8 Review - Clim8 Invest Overview

Clim8 Invest Overview

Clim8 was founded in 2020 as the pandemic was emerging, and has managed to raise more than $18 million since then. The platform aims to simplify investing with a focus on sustainable investing in the following sectors: green energy, clean mobility, climate technology, water systems, sustainable food, and circular economy.

According to Duncan Grierson, Founder & CEO of Clim8 Invest:

“ESG is a huge distraction in the fight against climate change. Investors need a new category that does what it says on the tin – Climate Impact.”

Clim8 offers two types of products: Individual Savings Accounts (ISA) and General Investment Accounts (GIA). You can finalize your registration online through the app, but be aware that it is only available to UK residents.

Clim8 Review - Clim8 Invest Pros and Cons

Clim8 Invest Pros and Cons

Pros

Cons

Clim8 Review - Clim8 Invest Platforms

Clim8 Invest Platforms

You should be comfortable managing your investments over a mobile application since Clim8 is currently only available through an iOS and Android app.

The management of Clim8 is actively working on improving the services offered as they are aware of the drawbacks of their platform. They intend to offer a desktop app at a later stage, make automatic withdrawal requests through the app, and enable portfolio risk adjustments without contacting customer support.

Clim8 Review - Clim8 Invest Product Offer, Portfolios, and Investment Strategy

Clim8 Invest Product Offer, Portfolios, and Investment Strategy

Clim8 currently offers two products: individual savings accounts (ISAs) and general investment accounts (GIAs).

Stocks and shares Individual Savings Account (ISA)

Every fiscal year, the government allows every UK tax resident to invest up to a specific amount in an individual savings account without paying any tax on growth or income (for the current fiscal year 2022 –2023, it is £20,000).

If you have an ISA account with another service provider, you can split the tax-free allowance between the two accounts, or you can transfer the ISA account to Clim8 Invest.

General Investment Account (GIA)

If you want to invest without the tax-related restrictions of ISA accounts, GIA is a suitable product. Unlike the stocks & shares ISA, you need to report regularly and pay tax on capital gains and on any dividends.

Portfolio Structure and Holdings

For each product, Clim8 offers three portfolios: Cautious, Balanced and Adventurous. They have different asset allocations depending on your risk profile (your willingness and ability to take risk).

Portfolio allocation of each strategy

Based on your risk profile, the holdings of your portfolio will include a combination of:

Clim8 investments span six investment themes: green energy, clean mobility, climate technology, water systems, sustainable food,and circular economy. The ultimate goal is to invest with an environmental impact mission, refraining from investing in fossil fuels, tobacco, gambling, weapons, and big tech companies.

The holdings in your portfolio might include some of the securities mentioned in the below list:

Clim8 Cautious Portfolio

If you have low risk tolerance, you would generally invest in portfolios with low risk, similar to the “Cautious” portfolio, but with a greater allocation to fixed income (safer investment class).

Below chart shows the breakdown of the companies' revenues by theme of the cautious portfolio:

Clim8 Balanced Portfolio

This portfolio is suitable for investors looking for a balanced risk-reward combination. Almost half of the portfolio is allocated to equities (53%).

Clim8 Adventurous Portfolio

If you are willing to take more risks to generate higher returns, and have a greater ability to bear potential losses, you would generally be tailored towards the “Adventurous” portfolio, with a greater allocation to equities.

Clim8 Portfolios Performance

As for performance, the benchmarks used to measure the performance of the portfolios are the MSCI World Index and the Barclays Global Aggregate Bond Index, but with different weight combinations for each portfolio:

In the below picture, we compiled the performance of the three portfolios, since their inception in August 2020 up to February 28, 2022:

Performance of the three portfolios since inception - August 2020

Keep in mind that past performance is not indicative of future returns.

You can only have one ISA account with a single risk profile type, while you can have up to 3 General Investment Accounts (GIA).

Environmental Impact

You can easily know the environmental impact of your investment. For example, Clim8 estimates that a £1,000 investment in a balanced portfolio for 1 year, would have saved 117kg of CO2 emissions and generated 42kWh of clean electricity.

The below image shows an estimation of the environmental impact of a £1,000 investment in each of the three portfolios.

Exchange Risk

You should take into account the exchange rate risk as your holdings are spread across different geographical regions. Once you open an account with Clim8, some of your funds will be converted to EUR or USD depending on the holdings in the portfolio. This conversion increases your exposure to currency risk, as unexpected movements in exchange rates might erode or increase the profits of your investments. For example, your foreign holdings will be converted back to GBP (partially or fully) in order to execute a withdrawal request or the closure of your account.

Clim8 Review - Clim8 Invest Fees

Clim8 Invest Fees

Clim8 charges a 0.6% annual management fee. The fees are calculated and charged monthly in arrears (after providing the service).

Additionally, you will need to account for two types of costs (not generated by Clim8):

Clim8 works on minimizing those trading costs by finding the lowest rates in the market and providing users with institutional rates.

Although the annual fees are similar to other robo-advisor companies in the UK, Clim8 does not offer tier pricing, which makes the competition a better choice for clients with large amounts. Moreover, compared to other international robo-advisors, Clim8 fees are slightly higher(ETFmatic 0.48% and Simplewealth 0.5%).

Withdrawal & Deposit fees

Clim8 does not charge any fees for withdrawals or deposits, or if you wish to transfer your funds to another provider. For partial withdrawals, a minimum of £5 must be kept in your portfolio, and the amount withdrawn should always be greater than £25.

Clim8 Review - Clim8 Invest Safety and Reliability

Clim8 Invest Safety and Reliability

Clim8 Invest is an appointed representative (a firm or person who runs regulated activities and acts as an agent for a firm directly authorised by the FCA) of WealthKernel Ltd., who is the custodian (holds customer assets).

WealthKernel is authorized and regulated by the Financial Conduct Authority (FCA - FRN 723719) and is also a member of the Financial Services Compensation Scheme (FSCS). Accordingly, in the event of insolvency, your money is protected by the FCA for up to £85,000 of the amount invested via Clim8.

Clim8 Review - Clim8 Invest Customer Support

Clim8 Invest Customer Support

Clim8 customer support is available by phone, or you can submit your inquiry online, and they will get back to you within 24 hours. Additionally, Clim8 is active on major social media platforms like Facebook, Instagram, Twitter, and LinkedIn.

Clim8 Review - Clim8 Invest Account Opening

Clim8 Invest Account Opening

Clim8’s application is free to install, and you can sign up for an account directly within minutes. All you need to have is a national insurance number and a UK residency.

First, you should decide which account type you want to invest in: an Individual Savings Account (ISA) or a General Investment Account (GIA).

Then, they assess your profile suitability after asking a few questions about:

Based on your answers, Clim8 will suggest a portfolio that is suitable to your profile. You can choose a portfolio other than the suggested one based on the level of risk you are comfortable with having.

After that, you will have to fill in your personal details. And to fund your account, you can use an easy bank transfer through TrueLayer, one of the UK’s leading Open Banking technology providers, or via a regular bank transfer.

You can set up a direct recurring payment where you automatically contribute to your account on a monthly basis. The deposit can range from as little as £10 to as much as £2,000 per payment. Alternatively, for a one-off deposit, you can start with £25 and there is no upper limit.

Clim8 Review - The bottom line

The bottom line

Clim8 is a new robo-advisor company promoting sustainable investment. It is suitable for new investors looking for automated investing that has a positive impact on climate change. You can start investing with £25, which is a major competitive advantage compared to other robo-advisor companies, and you can set up automatic recurring payments. On the downside, the service is only accessible through a mobile application and is only available for UK residents. Additionally, the track record for the company’s performance is short as their portfolios were created in August 2020. Finally, many features need to be automated in order to enhance users’ experience, like withdrawal requests and portfolio modifications.

In a nutshell, if you want to invest a large amount using robo-advisor services, you might find Clim8 Invest expensive when assessing its features compared to other companies.

Did you find this review helpful? Did it answer all your questions? Let us know your feedback in the comments below, or contact us directly!