ii ACE 40 performance review 2024
Here’s how interactive investor’s list of sustainable funds performed in the three months to the end of December and in 2024.
14th January 2025 14:46
Funds with US equity exposure were the best performers on the ACE 40 list over 2024.
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With the US market as a tailwind, the Brown Advisory US Sustainable Growth topped the outperformers’ list with a gain of 22.10%. The managers incorporate sustainable investing traits into their long-term fundamental research process, which focuses on identifying sustainable business advantages. The resulting growth bias also benefited fund performance over the year as this style led the market.
The fund underperformed the mainstream S&P 500 index but was significantly ahead of the passive alternative on the ACE 40, the iShares MSCI USA SRI ETF USD Acc GBP (LSE:SUUS),which posted a gain of 16.11%. This passive fund invests in a sub-set of equities within the MSCI USA index that demonstrate higher ESG ratings than other sector peers, as well as excluding companies involved in controversial businesses such as weapons, thermal coal, tobacco and oil sands.
The remaining three funds on the outperformers’ list are all global equity funds. UBS (Lux) FS MSCI World Socially Responsible UCITS ETF (LSE:UC44) tracks the MSCI World SRI Low Carbon Select 5% Issuer Capped TR index, and this gives it a slight growth bias versus mainstream indices. There was very slight underperformance versus the mainstream MSCI World index, with a return of 18.49% versus 20.79%.
Wellington Global Stewards produced a return of 15.1% and outperformed the average peer. The managers aim to hold stocks that combine a high relative return on capital with good stewardship, which they believe can lower capital costs over time. The size of the analytical resource supporting the managers and the experience levels within it are a key positive for this fund, while there is an equally impressive level of resource available on the sustainability side.
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The final fund on the top five performers’ list is Janus Henderson Global Sustainble Equity. The fund produced a positive return of 12.76% but slightly underperformed its global large-cap growth peers due to some short-term weakness in December, although over the medium term it shows significant success.
The bottom five performers on the ACE 40 are headed by the iShares Global Clean Energy ETF USD Dist GBP (LSE:INRG)with a loss of 24.68%. The fund tracks the S&P Global Clean Energy index and saw a significant negative contribution from stocks such as Vestas Wind Systems AS (XETRA:VWSB), Enphase Energy Inc (NASDAQ:ENPH) and SolarEdge Technologies Inc (NASDAQ:SEDG).
An actively managed alternative energy fund was the next worst performer. VT Gravis Clean Energy Income aims to provide an income in the region of 4.5% and primarily invests in closed-ended investment companies and yield companies that are involved in the provision, storage and consumption of clean energy. It looks to provide a more stable return profile than the market and achieved this to a degree, showing a smaller loss than the S&P Global Clean Energy index, but still fell by 14.83% over the year.
Pacific Assets Ord (LSE:PAC) is the next fund on the list with a 2.86% loss in share price terms, although the net asset value (NAV) return was a healthier +7.24%. This return still underperforms peers and mainstream benchmarks, and attribution versus the Morningstar Asia xJpn TME index shows most of this was in line with expectations and due to longstanding portfolio biases, such as the China underweight and the overweight to consumer staples.
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A share price return of -2.59% was seen by Impax Environmental Markets Ord (LSE:IEM), with the NAV return being 0.37%, which was very close to the ecology peer group average.This trust’s investable universe is defined by applying a screen on environmental, financial quality, and valuation criteria. Portfolio candidates must derive at least 50% of their sales from environmental activities, such as energy efficiency, water infrastructure, and pollution control. The portfolio tends to favour growth stocks in the smid-cap space and shows sector bets which deviate significantly from broad global indexes. Over the medium term the fund continues to outperform peers.
The final fund on the underperformers’ list is the only fixed-income fund that appears, the Amundi Global Aggregate Green Bond ETF Acc GBP (LSE:CLIM). This ETF tracks the Solactive Green Bond Index of EUR and USD-denominated investment-grade green bonds issued by sovereigns, supranationals and corporates. The ETF has a low tracking error and produced a 1.38% loss over the year.
Top five ACE 40 funds in 2024
| Group/Investment | 3 months | 1 year | 3 years | 5 years |
| Brown Advisory US Sust Gr GBP B Inc | 10.12 | 22.10 | 22.93 | 120.60 |
| UBS(Lux)FS MSCI World SRI USD Adis GBP (LSE:UC44) | 6.22 | 18.49 | 22.04 | 77.51 |
| iShares MSCI USA SRI ETF USD Acc GBP (LSE:SUUS) | 9.12 | 16.11 | 24.77 | 101.46 |
| Wellington Global Stewards GBP N Acc | 2.21 | 15.10 | 29.03 | 82.31 |
| Janus Henderson Global Sust Eq I Acc | 0.61 | 12.76 | 10.81 | 73.77 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 31/12/2024. Past performance is not a guide to future performance.
Bottom five ACE 40 funds in 2024
| Group/Investment | 3 months | 1 year | 3 years | 5 years |
| Amundi Glb Aggt Green Bd ETF Acc GBP (LSE:CLIM) | 0.58 | -1.38 | -11.00 | -10.90 |
| Impax Environmental Markets Ord (LSE:IEM) | -2.16 | -2.59 | -27.62 | 21.34 |
| Pacific Assets Ord (LSE:PAC) | -1.60 | -2.86 | 3.44 | 39.17 |
| VT Gravis Clean Energy Income C GBP Acc | -11.98 | -14.83 | -24.52 | -2.87 |
| iShares Global Clean Energy ETF USD Dist GBP (LSE:INRG) | -16.14 | -24.68 | -40.26 | 7.40 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 31/12/2024. Past performance is not a guide to future performance.
Top five ACE 40 funds over five years
| Group/Investment | 3 months | 1 year | 3 years | 5 years |
| Brown Advisory US Sust Gr GBP B Inc | 10.12 | 22.10 | 22.93 | 120.60 |
| iShares MSCI USA SRI ETF USD Acc GBP (LSE:SUUS) | 9.12 | 16.11 | 24.77 | 101.46 |
| Wellington Global Stewards GBP N Acc | 2.21 | 15.10 | 29.03 | 82.31 |
| UBS(Lux)FS MSCI World SRI USD Adis GBP (LSE:UC44) | 6.22 | 18.49 | 22.04 | 77.51 |
| Janus Henderson Global Sust Eq I Acc | 0.61 | 12.76 | 10.81 | 73.77 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 31/12/2024. Past performance is not a guide to future performance.
Bottom five ACE 40 funds over five years
| Group/Investment | 3 months | 1 year | 3 years | 5 years |
| CT UK Social Bond Z Grs Acc | 0.14 | 3.31 | -0.91 | 1.76 |
| PIMCO GIS Global Bond ESG Instl GBPH Inc | -0.73 | 3.43 | -3.34 | 1.39 |
| Liontrust Sust Fut Corp Bd 2 Grs Inc | -1.04 | 2.28 | -6.47 | -1.86 |
| VT Gravis Clean Energy Income C GBP Acc | -11.98 | -14.83 | -24.52 | -2.87 |
| Amundi Glb Aggt Green Bd ETF Acc GBP (LSE:CLIM) | 0.58 | -1.38 | -11.00 | -10.90 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 31/12/2024. Past performance is not a guide to future performance.
Most-bought ACE 40 funds in 2024
Most-sold ACE 40 funds in 2024
Changes to the ACE 40 list (under review/developments)
October 2024: ACE 40 Annual Review
Global Equities
- Removal of CT Responsible Global Equity Fund from Core category
- Addition of Janus Henderson Global Sustainable Equity Fund as a Core option
UK Equities
- Removal of Liontrust UK Ethical Fund from Adventurous category
- Removal of CT Responsible UK Income Fund from Core category
European Equities
- Removal of Liontrust Sustainable Future Europe Growth Fund from Core category
- Removal of Vanguard ESG Developed Europe Index Fund from Low Cost category
- Addition of iShares MSCI Europe SRI ETF as a Low Cost option
Mixed Asset
- Removal of CT Sustainable Universal MAP Cautious Fund from Low Cost category
- Removal of CT Sustainable Universal MAP Balanced Fund from Low Cost category
- Removal of CT Sustainable Universal MAP Growth Fund from Low Cost category
ACE 40 videos in Q4
None in Q4.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
The ACE 40 investments list is selected and managed by our independent research partner Morningstar and reviewed by our in-house investment experts to help narrow down the wide choice of available investment products. We believe it represents a set of high-quality choices, across different asset classes, regions, and investment types.
However, you should note that the selection of ACE 40 investments list is not a ‘personal recommendation’. This means we have not assessed your investment knowledge, your financial situation (including your ability to bear losses), your investment objectives, your risk tolerance, or your sustainability preferences.
You should ensure that any investment decisions you make are suitable for your personal circumstances, and if you are unsure about the suitability of a particular investment or think you need a personal recommendation, you should speak to a suitably qualified financial adviser.
The past performance of an investment is not a reliable indicator of future results, and ii does not guarantee or predict the future performance of the ACE 40 investments list as a whole or the constituent investments.
Risk Warning(s)
The value of your investments may go down as well as up. You may not get back all the money that you invest.
Investing in emerging markets involves different risks from developed markets, in many cases the risks are greater.
The value of international investments is affected by currency fluctuations which might reduce their value in sterling.
Disclosure(s)
All funds listed are the Accumulation version of the fund, where available, where any income generated within the fund is reinvested automatically. Income versions of these funds may also be available for investors looking for income generated to be paid directly into their account.
Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab.
Any changes to the ACE 40 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Review.
Details of all ACE 40 recommendations issued by ii during the previous 12-month period can be found here.
ii adheres to a strict code of conduct. Members of ii staff may have holdings in one or more ACE 40 investments, which could create a conflict of interest. Any member of staff involved in the development of research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, staff involved in the production of the ACE 40 investments list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the ACE 40 investments list. This is to avoid personal interests conflicting with the interests of investors in the ACE 40 investments.