10 most-bought ethical funds during November boom

by Lee Wild from interactive investor |

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Financial markets have risen sharply in November and demand for green investments has been strong.

The past month has been one of spectacular success for global stock markets. Investors reacted positively to both the US election result and news of a first vaccine for coronavirus, leaving every major share index in positive territory over the past four weeks.

Although President Trump still has not conceded the election, it is unthinkable that Joe Biden will not be at the inauguration ceremony on 20 January. After many months of speculation, the Democrat’s victory brought an element of clarity to the near-term outlook, at least politically. There now seems more chance of economic stimulus and less likelihood of extra regulation and an anti-business agenda.

Traders are also pricing in an end to the pandemic some time next year. Current consensus appears to be late spring. Following the Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) announcement at the start of the month, we now have another two potential vaccines, this time from Moderna (NASDAQ:MRNA) and Oxford University-AstraZeneca (LSE:AZN). There will be more.

Of course, there are events and government strategies that currently make investing in the UK different to elsewhere.

The Brexit saga, which began in 2016, looks to be nearing a conclusion one way or another. The transition period ends on 31 December and we still don’t have a trade deal. Judging by reports over the past few days, there’s still lots of work to do during the remainder of 2020.

Going green

One of the major strategy thrusts of the current government has been the green economy. The UK has just launched a 10-point plan for a green industrial revolution ahead of the 26th United Nations Climate Change Conference, also known as COP26, hosted by Glasgow in 2021. The summit aims to get countries to speed up progress towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.

Extra investment in offshore wind, hydrogen, nuclear, electric vehicles, part of a drive toward a net zero carbon emissions by 2050, will create and support up to 250,000 British jobs. 

There has also been significantly greater interest in ethical investing, particularly funds, investment trusts and exchange-traded funds (ETFs), over the past year, and this new political commitment only intensifies the focus on funds and stocks with environmental benefits.

interactive investor customers have certainly been enthusiastic buyers of green investments, as evidenced by engagement with our ACE 40 list of rated ethical funds and trusts. 

Most-bought ACE 40 investments over the past month

Fund name
iShares Global Clean Energy ETF
Baillie Gifford Positive Change B Acc
Impax Environmental Markets (LSE:IEM)
Royal London Sustainable World C Acc
Fundsmith Sustainable Equity I Acc
Syncona (LSE:SYNC)
Rathbone Ethical Bond I Acc
Royal London Sustainable Leaders C Acc
Baillie Gifford Global Stewardship B Acc
Liontrust UK Ethical 2 Net Acc
Source: interactive investor between 25 October and 24 November 2020

ACE 40 stands for:

Funds that focus on simply excluding companies, sectors or specific business practices. 

Funds that carefully consider an often wide range of ethical and/or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.

Funds that focus on companies delivering positive social and/or environmental outcomes.

You can find out more about our range of ethical investments here and use our handy ethical jargon buster to help you understand more about this exciting growth area.

ACE 40 rated investment performance over the past month

Fund % change*
Liontrust UK Ethical 2 Net Acc 11.04
Unicorn UK Ethical Income B Acc 10.35
iShares Global Clean Energy ETF USD Dist GBP 9.79
Janus Henderson UK Responsible Inc I Inc 9.30
UBS ETF MSCI Pacific SRI USD A dis GBP (LSE:UB45) 8.69
L&G Ethical I Acc 8.63
BMO Responsible UK Income 2 Acc 8.16
Vanguard SRI European Stk EUR Acc 6.28
Aegon Ethical Equity GBP B Acc 5.40
Source:   SharePad *Price change between 25 October and 24 November 2020  

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.

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