ii ACE 40 investments:
Pacific Assets IT

Why we recommend it

Manager David Gait is an experienced investor with more than 20 years at the firm and he has led this all-cap strategy since 2005. He is part of a 14-person team that forms the Sustainable Funds Group.

The strategy employs a bottom-up, benchmark-agnostic, and long-term approach that looks for high-quality companies with sustainable and predictable businesses. There is a clear focus on management quality.

The portfolio has 30-60 stocks, bearing little resemblance to the MSCI All Country Asia Pacific ex Japan Index. A preference for franchises with durable business models, high-integrity management teams, and limited regulatory/political oversight leads to a persistent overweighting in India at the expense of China and not surprisingly often lumpy performance relative to the benchmark. There are also biases down the market-cap scale, towards the growth style and especially to quality metrics.

Opinion
In general, the fund’s best relative returns have come when the market has fallen, and conversely, the portfolio is expected to lag in momentum driven markets, led by multiple expansion. Over recent years the country bias has been a significant determinant of relative performance.

Overall, the experience of the manager, team support and the time-tested process are likely to make it a long-term winner.

 The fund is more expensive than peers: The investment trust levies annual ongoing charges of 1.14%.

Ethical criteria

ii ACE sustainable style: Considers. This means the trust carefully considers an often wide range of ethical and/ or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.

Fund EcoMarket category: Sustainability Themed. This relates to funds that focus on sustainability related issues and opportunities as part of their investment strategy, often alongside ethical criteria. Their focus is often around longer term societal and environmental trends.

How the fund is managed: This investment trust places an emphasis on companies that are socially and environmentally efficient and can demonstrate responsible business practices. The trust invests in companies which are positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate. Companies are classified into one of three sustainability sectors: sustainable goods and services, responsible finance, and required infrastructure. There is also a strong emphasis on ‘quality’ businesses that can perform well over the business cycle.