January’s top performing sustainable funds

Written by Rebecca Jones on 5th Feb 2019

In a new series produced in collaboration with 3d Investing, we’ll 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 three 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.

 

January saw some striking returns in the alternative side of the 3d 3Star rated fund universe. Top performer over the month was the Medicx fund, which channels funding into NHS property and which returned more than 19 per cent in share price growth over the period.

This was due almost entirely to the announcement of a merger between the fund and PHP Healthcare on 24 January, as part of which current Medicx shareholders will get 0.77 PHP shares for every one of theirs. This sent the Medicx share price soaring from 77.6p to 90p between 23 and 30 January.

Assura, another trust investing in medical property, also had a strong start to the year, returning 13.3 per cent over the month and helping to lift three year returns to over 25 per cent.

 

Stellar, but short term

Reflecting wide global appetite for biotechnology stocks in the face of a string of upbeat early trading reports, Pictet Biotech returned more than 13 per cent in January – a welcome boost for a fund that has struggled in recent years, leaving it languishing at the bottom of its sector.

Timber and forestry also had a strong start to the year with the iShares S&P Global Timber & Forestry Index delivering the second strongest returns of 2019 so far at 15.5 per cent. Meanwhile, Pictet Timber gained a very respectable 13 per cent.

Commenting on the, John Fleetwood, managing director of 3d Investing says: “It’s notable that specialist funds have had a good month, which is often not surprising on a one month view. For example, the Pictet Timber fund has had a very good January but is down 16 per cent over a year, against a ten-year rise of 145 per cent.

“The most notable figure is the rise of MedicX to the top of the table. This medical property fund has agreed a takeover by Primary Healthcare Properties at a price significantly higher than before the agreed bid.”

 

Top ten performing 3d three star rated funds in January 2019

Fund Total % return 1m Rank in sector Total % return 1yr Rank in sector Total % return 3yr Rank in sector
1 Medicx Group Medicx Fund 19.3 1/16 15.8 1/15 28.6 2/7
2 iShares S&P Global Timber & Forestry Index ETF 15.5 5/172 -11.5 139/169 64.2 5/144
3 Pictet Biotech 14.3 30195 -1.3 49/78 9.7 59/71
4 Assura Group 13.3 n/a 1.7 n/a 25.0 n/a
5 Alquity Latin America 13.2 32/39 -2.3 13/38 55.3 33/38
6 Pictet Timber 12.9 59/590 -16.5 428/537 31.5 97/524
7 Standard Life Investments UK Equity Impact Employment Opportunities 11.2 1/103 n/a n/a n/a n/a
8 East Capital Sustainable Emerging Markets 11.2 12/298 -14.8 160/280
9 iShares Global Clean Energy UCITS ETF 10.7 137/600 9.2 56/542 28.0 127/513
10 Sarasin IE Sustainable Global Real Estate Equity 10.5 29/53 -2.8 53/56 13.8 38/49

Performance data sourced from FE Analytics and is to 31 January 2019.

 

Latin favours

While fairly devastating news for the Amazon rainforest, the election of President Jair Bolsonaro in Brazil has sent Latin American markets soaring with his plans to sell off state owned enterprises combined with proposals for pension reform exciting investors.

This lifted the Alquity Latin America fund, which enjoyed the rally across the Brazilian market thanks especially to its holding in the Brazilian stock exchange. The fund re-invests a portion of profits from the fund into micro-finance social initiatives in the region.

Similarly, the East Capital Sustainable Emerging Markets was boosted by its 10 per cent investment in the Americas region, as the fund returned 11.2 per cent in January. Over one year, however, this relatively new fund is still don more than 14 per cent.

Suggesting the South American rally may have firmer legs, the Alquity Latin America also made it into our table of strong three years performers, with the fund delivering the eighth strongest return of our group over the period at 56.5 per cent.

 

Long-term global leaders

Proven long term performer Impax Environmental Markets leads the table, however, with the globally focussed, cross green-industry trust returning 85 per cent in share price growth since January 2016. The open-ended version of the fund was also the tenth strongest performer with a return of 54 per cent.

Global equity stalwarts Liontrust Global Growth and Janus Henderson Global Sustainable Equity also made the top ten with three-year returns of 60 per cent and 55 per cent respectively, placing both among the very best performers in their respective sectors.

Alquity Indian Subcontinent also retained the leading three-year position it has occupied since November, ranking sixth with a return of 56.5 per cent. Demonstrating the highly volatile nature of this emerging Asian market, however, over one month it has shed 8.4 per cent.

 

Top ten performing 3d three star rated funds three years to 31 January 2019

Fund Total % return 1m Rank in sector Total % return 1yr Rank in sector Total % return 3yr Rank in sector
1 Impax Environmental Markets Trust 5.9 1 / 3 2.9 1 / 3 84.7 1 / 3
2 3i Investments Trust 2.5 2 / 6 29.7 1 / 6 68.0 1 / 6
3 iShares S&P Global Timber & Forestry Index 15.5 5 / 172 -11.5 139 / 169 64.2 5 / 144
4 Liontrust Sustainable Future Global Growth 5.5 60 / 276 5.7 13 / 261 59.6 13 / 222
5 Pictet Robotics 9.0 55 / 89 -4.3 47 / 77 57.8 31 / 62
6 Alquity Indian Subcontinent -8.4 46 / 46 -17.2 29 / 45 56.5 1 / 39
7 BMO Responsible Global Equity 5.0 98 / 276 0.3 52 / 261 55.9 22 / 222
8 Alquity Latin America 13.2 32 / 39 -2.3 13 / 38 55.3 33 / 38
9 Janus Henderson Global Sustainable Equity 6.5 24 / 276 -0.7 85 / 261 55.2 25 / 222
10 Impax Environmental Leaders 5.1 83 / 101 -2.9 40 / 88 54.0 1 / 68

Performance data sourced from FE Analytics and is to 31 January 2019.

 

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

 

To invest in any of these funds you can speak to your financial adviser or invest through a dealing account or stocks and shares ISA on a low cost online fund platform.

 

Risk warning: Past performance is not a guide to future performance. The value of investments and the income derived from them may go down as well as up, so you could get back less than you originally invested.

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