Good Money Week: renewable energy-focused portfolios top ii ethical bestsellers list

Energy shortages put spotlight back on traditional ‘dirty’ energy sectors.

GoodMoneyWeek 2021 (2-8 October) ironically comes amid an escalating energy supply shortage that has put ‘traditional’ or ‘dirty’ energy back in the spotlight, as more coal is perhaps likely to be burned this winter to meet energy needs.

Shortages and increased demand from Asia have seen the cost of gas spike. The lack of wind-generated power as usual for this time of year owing to warm, still, autumn weather has also been an issue.

Demand for renewable energy-focused funds and investment trusts remains strong among customers of interactive investor, accounting for seven of the top 10 bestselling ethical funds and investment trusts on the ii ethical investing long list* so far this year (to 27 September 2021). And all of these are closed-ended investment companies.

Greencoat UK Wind (LSE:UKW) investment trust ranks highest in first position, ahead of Gore Street Energy (LSE:GSF) in second position and Renewables Infrastructure Group (LSE:TRIG) in third.

Investment trusts dominate the top 10, and this could in part be due to their clear single strategies, featuring either infrastructure, wind, solar and clean energy options. Dividend yields could also be a factor.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The scale of the energy supply shortage requires quick solutions to protect consumers from exorbitant rises in energy costs. It’s ironic that our reliance on ‘traditional’ energy has been thrown into the spotlight ahead of COP26 next month, but the path towards net-zero carbon emissions by the middle of the century was never going to be easy. Renewables have to be part of the solution, and the recent weather patterns – an absence of wind in the UK – shows that there is plenty to focus the minds on.

“Funds focused on the ‘E’ for environmental in ESG continues to dominate the list of platform bestsellers. Interestingly, budding interest in these portfolios could be down to the level of income on offer.

“The ‘Grow Back Better’ campaign for a green economic recovery continues to gain momentum, and the climate emergency remains an emotive topic likely to prompt investment in more sustainable options. A recent interactive investor poll suggests that the extent of the climate change outlined in the UN’s Intergovernmental Panel on Climate Change (IPCC) report, has resonated with investors, with just under two-fifths (39%) of respondents stating they were more likely to invest in ‘green’ investments as a result of report’s key findings. But it’s crucial to have a balanced portfolio.”

interactive investor publishes a long list of more than 140 ESG funds, investment trusts and ETFs available on the platform broken down into three interactive investor ACE investment styles: Avoids, Considers and Embraces, to help match ethical investors with solutions that align to their morals. Truly green objectives are likely to be found in the ‘embraces’ category.

ii also maintain ACE 40, a list of ethical funds we rate. For those yet to get started on their investing journey, ii also recommends a range of sustainable ‘Quick Start’ funds for beginner investors. The BMO Sustainable Universal MAP range offers Cautious, Balanced and Growth options for different risk appetites.”

Most-bought ethical funds/investment trusts on interactive investor ethical long list this year (to 27 September 2021)

Notes to editors

*The ii ethical investing long list is a list of all ethical fund and investment trusts available on interactive investor.

The poll was conducted among 1,617 interactive investor website visitors between 17 and 23 August 2021.