Coronavirus ii ACE 30 update: Brown Advisory US Sustainable Growth

interactive investor's analysts bring you an urgent update on this ii ACE 30 rated ethical investment.

The coronavirus outbreak and subsequent pandemic have had a significant impact on the global economy and financial markets. Many share and fund prices have fallen sharply in a very short space of time, as has the cost of oil and other commodities. Volatility has reached levels not seen since the peak of the financial crisis in 2008, and many assets remain prone to sharp movements both up and down.

Given these unprecedented circumstances, with citizens in many of the world’s largest cities confined to their homes, we are collecting updates from managers of funds on the ii ACE 30 rated list of ethical investments. 

• Want to invest ethically? ii’s ACE 30 list of ethical investments can help
• Find out why this fund is on the ii ACE 30 investments list

Here is the latest from Karina Funk at the Brown Advisory US Sustainable Growth fund. 

“The Brown Advisory team look for strong fundamentals, sustainable competitive advantages and compelling valuations.

“We entered the year with a very large overweight to Health Care.  This overweight has proven helpful as names such as West Pharmaceutical Services, Thermo Fisher and Bio-Rad have held up very well.

“At current price levels we are eager to add to a few names but are conscientious of not drawing capital away from precisely the companies that have held up our downside capture since the beginning of the year. Where we have seen hefty valuation multiples persist among names that have held up, we have taken the opportunity to trim, and to add capital to names with close to historically compressed valuations.

“In some cases, we have added to companies that have attractive valuations, and have business models that are generally uncorrelated with the demand or supply chain disruptions associated with the coronavirus crisis. In other cases, we have been able to add to holdings that may even stand to benefit by providing critical products and services at this time of acute need.

“During these times of market dislocations, we are very focused on upgrading the portfolio with stocks that have been on our candidate list for a long time (sometimes years), and where both the valuations and the strength of the business models will, we believe, contribute to a more robust portfolio. Of course, we will not get the timing right in the near term, so we look out 1-3 years - as best we can - to discern where to consolidate capital into better businesses.

“Throughout all of this market volatility, we continue to execute on our disciplined process of thorough fundamental and sustainability research, with the goal of constructing and managing a portfolio with attractive risk-adjusted returns.”