November’s top performing sustainable funds

Written by Rebecca Jones on 4th Dec 2018

In a new series produced in collaboration with 3d Investing, Good With Money will be taking a regular monthly look at the top performing funds in the sustainable investment universe, tracking trends and trendsetters in one of the fastest growing areas of global finance today.

Our universe consists of funds rated 3 stars and above by 3d Investing, which has rigorously screened thousands of funds available to UK investors to come up with just 210 that meet this standard. We sort this list by the top performers of the month and then again by three years, giving a comprehensive overview.

In a month where many global developed markets registered losses – most notably those in the UK and Europe – it is perhaps no surprise to see our inaugural top ten sustainable fund performers list dominated by funds that invest in Asia and emerging markets.

Leading the pack is Alquity Indian Subcontinent, a small fund of just £39 million (small in this game!), which invests in companies throughout India and parts of Asia. Over November the fund returned an impressive 12.4 per cent, underlining a surge in Indian markets over the period as the nation benefits from investor flows leaving China as it fights its trade war with the US.

Highlighting the volatility common in the Indian market, though, over one year to 30 November the fund has in-fact lost 11.4 per cent. However, it is again the top performer of the 3d 3star rated universe over three years – hinting at a bright long term picture for the world’s second most populous nation.

Alquity also saw two more of its funds make the top ten for November: Alquity Asia and Alquity Future World, which returned 8.3 per cent and 7.5 per cent respectively in November.

Alquity invests a portion of the profits made from all of its funds into grassroots initiatives such as local trade co-operatives throughout developing markets.

Top ten performing 3d 3star rated funds in November 2018

Fund

Total % return 1m

Rank in sector Total % return 1yr Rank in sector Total % return 3yr Rank in sector
1 Alquity Indian Subcontinent

12.4

5 / 46 -11.4 41 / 45 68.9 1 / 39
2 iShares Global Clean Energy UCITS ETF

10.5

57 / 594 9.0 82 / 535 21.6 237 / 507
3 Pacific Assets Trust PLC

8.3

1 / 15 14.2 1 / 15 56.0 8 / 15
4 Alquity Asia

8.3

7 / 192 -8.2 128 / 185 28.7 144 / 166
5 3i Infrastructure PLC

7.9

1 / 6 28.1 1 / 6 61.4 1 / 6
6 Alquity Future World

7.5

7 / 297 -5.5 127 / 269 n/a n/a
7 Guinness Alternative Energy

6.9

2 / 95 -0.9 38 / 92 17.3 70 / 87
8 Stewart Investors Asia Pacific Sustainability

6.8

6 / 118 9.5 5 / 111 57.6 13 / 101
9 East Capital Sustainable Emerging Markets

5.3

52 / 297 -15.1 261 / 269 n/a n/a
10 Impax Asian Environmental Markets

5.2

4 / 21 -4.1 12 / 20 42.0 10 / 18

Commenting on the top performers, John Fleetwood, managing director of 3d Investing, says: “Asian funds have fared particularly well over the past month whilst global funds have struggled.

“This has reflected markets as a whole, but of particular note, is the excellent relative performance of all of these funds within their mainstream sectors, with many ethical and sustainable funds in the top 25 per cent of all funds.”

Building a cleaner future

Other Asia focussed funds to make both the top ten for November and the top ten over three years (see below) were the Pacific Assets Trust and Stewart Investors Asia Sustainability, with both funds again benefitting from strong exposure to India over the long and short term.

Away from Eastern promises, sustainable infrastructure also performed well, with the 3i Infrastructure investment trust returning 7.9 per cent last month. With more than £2 billion under management this is a behemoth of UK infrastructure, however its strong ESG focus means it makes the 3d grade.

Highlighting the continued rise of renewables, clean energy also had a strong month, with the iShares Global Clean Energy UCITS ETF delivering the second biggest return of 10.5 per cent in November, while Guinness Alternative Energy made 6.9 per cent for investors.

As world leaders meet in Poland to hammer out a stronger, binding global climate agreement, this perhaps highlights the power private investors have to forge a path for renewable energy – even when faced with government intransigence.

Top ten performing 3d 3star rated funds three years to 30 November 2018

Fund Total % return 1m Rank in sector Total % return 1yr Rank in sector

Total % return 3yr

Rank in sector
1 Alquity Indian Subcontinent 12.4 5 / 46 -11.4 41 / 45

68.9

1 / 39
2 Parvest Climate Impact Privilege 3.8 5 / 95 0.5 59 / 83

52.6

6 / 64
3 Schroder ISF Global Sustainable Growth 3.5 13 / 95 11.1 2 / 83

56.1

2 / 64
4 Pictet Robotics 3.3 11 / 86 1.4 52 / 75

69.4

34 / 61
5 iShares S&P Global Timber & Forestry Index -4.0 164 / 172 -2.4 125 / 167

52.0

45 / 143
6 Impax Environmental Markets PLC 3.6 1 / 3 7.0 1 / 3

79.5

1 / 3
7 Pacific Assets Trust PLC 8.3 1 / 15 14.2 1 / 15

56.0

8 / 15
8 3i Infrastructure PLC 7.9 1 / 6 28.1 1 / 6

61.4

1 / 6
9 Stewart Investors Worldwide Sustainability 4.0 9 / 273 5.1 59 / 257

53.8

16 / 219
10 Stewart Investors Asia Pacific Sustainability 6.8 6 / 118 9.5 5 / 111

57.6

13 / 101

 

The 3d Investing Methodology

The 3D Star Rating is a shorthand for identifying the ‘best’ sustainable investment funds registered for sale in the UK. It is derived from a combination of quantitative and qualitative data to objectively determine those funds that best meet the three core tenets of 3D Investing – doing good, avoiding harm and making money. It reflects the level of confidence we hold in the funds to meet these objectives and is based on our assessment of funds in five key areas:

  • Quality of sustainability management
  • Avoidance of ethical controversy
  • Social impact
  • Financial performance
  • Transparency

The overall rating is based on a weighted score combining all of these factors, and is ultimately derived from stock by stock analysis of all of the underlying holdings of the fund.

The 3D Star Rating is intended to facilitate quick and easy identification of those funds that best meet the 3D Investing objectives of making a positive social impact, avoiding ethically controversial companies and delivering a decent financial return. The 3D Star Rating is a demanding ranking that seeks to identify the very best funds. As such, a three star rating is far from average and in fact means the fund is likely to be amongst the best in its sector. A five star rating is reserved for the very best funds and is an aspirational standard.

To find out more see the latest Good With Money and 3d Investing Good Investment Review – your guide to the best sustainable funds on the market

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