May’s top 10 performing sustainable investment funds

Written by Rebecca Jones on 4th Jun 2019

In our series produced in collaboration with 3d Investingwe take 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.

 

Four out of ten of May’s top performing sustainable funds were green bond funds – or funds that invest in the debt of companies – with the LO Global Climate Bond fund topping the table with a return of 4.4 per cent last month.

Bonds were boosted by a tumble in global stock markets, which saw some of their steepest declines of the year in May as US President Donald Trump and China’s premier Xi Jinping exchanged fresh blows over trade tarrifs.

In troubled times investors often flock to bonds as they are considered safer than equities – or shares – as they are less volatile, plus if a company goes bust creditors (bond holders) get repaid first.

Climate and green bond funds also benefit from the strong current trend (woohoo!) towards decarbonisation and environmental awareness. All of the bond funds in our selection, for example, give money to companies to improve their energy use and efficiency, or implement other beneficial social or governance factors.

Many will have also been boosted by a weak pound, which is good news for funds like this that trade in euros.

Our other star bond performers last month were Allianz Green Bond, which returned 3.6 per cent, Parvest Green Bond Classic just behind with 3.5 per cent, and Mirova Euro Green & Sustainable Bond with 2.9 per cent. The latter is one of the longest established green bonds funds and has returned nearly 19 per cent over three years.

Assura Group, an investment trust investing in medical property like doctor’s surgeries, was our top performing fund of the month, however. The announced takeover of primary care developer GPI boosted its share price while a strong set of annual results released in May also kept investors happy, with the trust returning 7.6 per cent.

 

Top performing 3d 3 star rated funds one month to 31 May 2019

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

Fund

Total % return 1m

Rank in sector Total % return 1yr Rank in sector Total % return 3yr Rank in sector
1 Assura Group Ltd

7.6

n/a 18.8 n/a 30.4 n/a
2 Alquity Indian Subcontinent

5.1

22 / 47 -8.2 46 / 47 66.5 1 / 43
3 LO Global Climate Bond

4.4

94 / 355 8.3 159 / 330 n/a n/a
4 Primary Health Trust

4.1

n/a 26.8 n/a 53.9 n/a
5 Alquity Latin America

3.7

8 / 38 5.9 34 / 37 28.4 35 / 37
6 Allianz Green Bond

3.6

9 / 46 4.5 14 / 44 n/a n/a
7 Parvest Green Bond Classic

3.5

450 / 1032 3.3 510 / 930 n/a n/a
8 Greencoat Renewables Trust

3.3

1 / 11 13.3 6 / 8 n/a n/a
9 Mirova Euro Green & Sustainable Bond

2.9

40 / 46 4.2 23 / 44 18.7 24 / 34
10 Sarasin IE Sustainable Global Real Estate Equity

2.5

38 / 53 5.9 47 / 55 20.3 45 / 48

Yet demonstrating the power of investing in equities, or shares, over the long term, over three years our top performer table is dominated by funds that invest in global companies. Seven out of ten of our longer term star were global funds, with the Impax Environmental Markets Trust topping the group with a three year return of 74.6 per cent.

The Liontrust Sustainable Investment team also saw their top performing global funds again make the grade. Liontrust Sustainable Future Global Growth delivered 64.3 per cent in the three years to the end of May, while Liontrust Sustainable Future Absolute Growth came in with 56.9 per cent – making it the second best performing fund out of 212 funds in its mainstream sector (i.e. against funds that invest in fossil fuels, arms, tobacco, etc.).

However, an infrastructure trust again topped the table, with 3i Infrastructure – which ploughs money into building projects like hospitals and housing – returning 76.6 per cent in the three years to May.

 

Top performing 3d 3 star rated funds 3 years to 31 May 2019

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

Total % return 3yr

Rank in sector
1 3I Infrastructure Trust 0.4 2 / 6 31.8 1 / 6

76.6

1 / 6
2 Impax Environmental Markets Trust -4.3 3 / 3 7.8 2 / 3

74.6

1 / 3
3 Alquity Indian Subcontinent 5.1 22 / 47 -8.2 46 / 47

66.5

1 / 43
4 Liontrust Sustainable Future Global Growth -1.5 86 / 281 13.2 16 / 265

64.3

8 / 226
5 Schroder ISF Global Sustainable Growth -1.3 35 / 112 11.0 9 / 95

63.5

2 / 72
6 Kames Global Sustainable Equity 2.2 8 / 246 7.4 33 / 188

59.1

7 / 145
7 BMO Responsible Global Equity -1.5 83 / 281 6.8 43 / 265

58.8

19 / 226
8 Liontrust Sustainable Future Absolute Growth -1.5 102 / 281 11.5 2 / 259

56.9

2 / 212
9 Janus Henderson Global Sustainable Equity -2.5 153 / 281 4.8 75 / 265

56.8

23 / 226
10 Pacific Assets Trust -1.7 1 / 9 14.0 1 / 9

56.4

8 / 9

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

 

Emerging Markets also put in a strong show, with both Alquity Indian Subcontinent and the Pacific Assets Trust making the top table. The former invests purely in the Indian market – one of the fastest developing in the world – while the latter spreads investors’ money across the Pacific Asia region.

As demonstrated by their one year return figures, though, Alquity’s is a highly volatile fund: it has lost 9 per cent over a 12 month period due to the choppy nature of the nascent Indian economy. On the other hand, Pacific Assets is a solid long term player – it’s been going since 1985 and over ten years has returned 268 per cent.

 

For the full list of 3d 3star rated funds see the latest Good With Money and 3d Investing Good Investment Review – your guide to the brightest and best sustainable funds on the market

To invest in any of these funds see our guide to the Top 10 Sustainable Investment Platforms, or speak to your financial adviser or wealth manager.

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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