ii ACE 40 performance review: Q3 2025
Here’s how interactive investor’s sustainable funds performed in the three months to the end of September.
15th October 2025 11:38
Over the quarter, the strength of growth-biased and small-cap equities (ex the US) versus value-biased equities and bonds, explains much of the relative performance of the funds on the ACE 40 list.
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As was the case last quarter, the strongest-performing fund on the ACE 40 was Polar Capital Smart Energy, which posted a return of 22.75%. The fund is managed by the experienced Thiemo Lang, whose investment process focuses on bottom-up selection of quality-growth companies that trade at reasonable valuations and provide solutions that enable the decarbonisation and electrification of the global energy sector.
High exposure to the technology sector is a feature, and that has been a tailwind with the sector being the best performer this quarter. Notable stock successes include Delta Electronics (Thailand) PCL SGDR (SGX:TDED) and Lumentum Holdings Inc (NASDAQ:LITE) plus Lynas Rare Earths Ltd (ASX:LYC) in the materials sector.
A related passive fund, iShares Global Clean Engy Trns ETF $Dist GBP (LSE:INRG), was the next best performer with a return of just over 19%. The fund tracks the S&P Global Clean Energy Transition Index and saw significant positive contributions from stocks such as Bloom Energy Corp Class A (NYSE:BE), which saw an exceptional increase of more than 259%.
The Fidelity Asia Equity ESG fund (formerly named Fidelity Sustainable Asia Equity)produced a return of 16%. In addition to producing strong absolute returns, the fund outperformed the Morningstar Asia ex Japan TME Index, primarily through strong stock selection within China with names such as Alibaba Group Holding Ltd ADR (NYSE:BABA), Advanced Micro-fabrication Equipment and Xiaomi Corp Class B (SEHK:1810) among a number of contributors.
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Exposure to China and Taiwan pushed the iShares MSCI EM SRI ETF USD Acc GBP to a 10.67% return over the quarter, while the final fund on the top five outperformers’ list, Schroder Global Sustainable Value Equity Fund, returned 7.95%.
The fund slightly underperformed the mainstream Morningstar Global TME Index primarily due to an underweight to the IT sector. This positioning is in line with expectations for this approach which has a focus on companies deemed to be best in class versus peers in terms of sustainability, while the underlying stock selection methodology follows the established team process that seeks to identify contrarian, recovery ideas with strong financials.
With a negative return of 2.87% the TM Gravis Clean Energy Income C GBP Acc was the weakest performer over the quarter. The fund aims to provide an income in the region of 4.5% and primarily invests in closed-ended investment companies and yield companies that are involved in the provision, storage and consumption of clean energy. The disappointing quarterly performance reflected negative returns from stocks such as Boralex Inc Class A (TSE:BLX), Clearway Energy Inc Class C (NYSE:CWEN) and Meridian Energy Ltd (ASX:MEZ).
The relative weakness in the European equity market over the quarter is reflected in the 0.92% return from the iShares MSCI Europe SRI ETF, which tracks the MSCI Europe SRI Select Reduced Fossil Fuel Index and the negative 1.07% return from the M&G European Sustain Paris Alignedfund.
This fund has a focus on companies showing sustainable competitive advantages, which results in a growth bias and a slight tilt down the market-cap scale. Attribution versus the Morningstar DM Eur xUK TME Index shows some weakness due to stock selection in the communication services and consumer discretionary sectors. Despite the short-term weakness the fund remains ahead of the index over the medium and longer term.
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The final two funds on the underperformers’ list are both sterling corporate bond funds. Liontrust Sust Fut Corp Bd 2 Grs Increturned 0.55% and CT UK Social Bondreturned 0.73%. The returns of both funds are just ahead of the mainstream Morningstar UK Corporate Bond Index return and therefore represent good outcomes. The limited upside from the asset class reflected rising gilt yields due to inflation and fiscal policy concerns.
Top five ACE 40 funds in Q3 2025
| Group/Investment | 3 month (%) | YTD (%) | 1 year (%) | 3 years (%) | 5 years (%) |
| Polar Capital Smart Energy I Acc GBP | 22.75 | 24.67 | 33.51 | 46.95 | |
| iShares Global Clean Engy Trns ETF $Dist GBP (LSE:INRG) | 19.09 | 25.48 | 5.23 | -32.95 | -17.42 |
| Fidelity Responsible Asia Equity W Acc | 16.00 | 17.86 | 14.55 | 20.83 | 20.11 |
| iShares MSCI EM SRI ETF USD Acc GBP (LSE:SUES) | 10.67 | 16.95 | 14.71 | 20.74 | 31.05 |
| Schroder Global Sust Val Eq Z Cap | 7.95 | 14.94 | 12.31 | 51.40 | 100.47 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 30/09/2025. Past performance is not a guide to future performance.
Bottom five ACE 40 funds in Q3 2025
| Group/Investment | 3 month (%) | YTD (%) | 1 year (%) | 3 years (%) | 5 years (%) |
| Janus Henderson UK Responsible Inc I In | 0.80 | 12.90 | 7.01 | 49.16 | 63.16 |
| CT UK Social Bond Z Grs Acc£ | 0.73 | 4.38 | 4.52 | 21.72 | 3.50 |
| Liontrust Sust Fut Corp Bd 2 Grs Inc | 0.55 | 4.50 | 3.41 | 31.59 | -0.35 |
| M&G European Sustain Paris Aligned I Acc | -1.07 | 13.27 | 8.64 | 64.66 | 71.08 |
| TM Gravis Clean Energy Income C GBP Acc | -2.87 | 6.35 | -6.40 | -23.89 | -7.17 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 30/09/2025. Past performance is not a guide to future performance.
Top five ACE 40 funds over five years
| Group/Investment | 3 month (%) | YTD (%) | 1 year (%) | 3 years (%) | 5 years (%) |
| Schroder Global Sust Val Eq Z Cap | 7.95 | 14.94 | 12.31 | 51.40 | 100.47 |
| EdenTree European Equity B Inc | 5.93 | 25.91 | 16.97 | 70.91 | 91.75 |
| iShares MSCI USA SRI ETF USD Acc GBP | 6.65 | 1.35 | 10.59 | 36.13 | 75.06 |
| Wellington Global Stewards GBP N Acc | 3.26 | 2.21 | 4.47 | 41.14 | 74.91 |
| M&G European Sustain Paris Aligned I Acc | -1.07 | 13.27 | 8.64 | 64.66 | 71.08 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 30/09/2025. Past performance is not a guide to future performance.
Bottom five ACE 40 funds over five years
| Group/Investment | 3 month (%) | YTD (%) | 1 year (%) | 3 years (%) | 5 years (%) |
| PIMCO GIS Global Bond ESG Instl GBPH Inc | 1.61 | 5.11 | 4.34 | 17.04 | 1.83 |
| Liontrust Sust Fut Corp Bd 2 Grs Inc | 0.55 | 4.50 | 3.41 | 31.59 | -0.35 |
| TM Gravis Clean Energy Income C GBP Acc | -2.87 | 6.35 | -6.40 | -23.89 | -7.17 |
| Amundi Glb Aggt Green Bd ETF Acc GBP (LSE:CLIM) | 2.36 | 5.03 | 5.64 | 7.02 | -14.83 |
| iShares Global Clean Engy Trns ETF $Dist GBP (LSE:INRG) | 19.09 | 25.48 | 5.23 | -32.95 | -17.42 |
Source: Morningstar - Total Return for OE / Market Return for CE - (GBP) to 30/09/2025. Past performance is not a guide to future performance.
Most-bought ACE 40 funds in Q3 2025
Most-sold ACE 40 funds in Q3 2025
Changes to the ACE 40 list (under review/developments)
None in Q3.
ACE 40 videos in Q3
None in Q3.
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.
The ACE 40 investments list is selected and managed by our independent research partner Morningstar and reviewed by our in-house investment experts to help narrow down the wide choice of available investment products. We believe it represents a set of high-quality choices, across different asset classes, regions, and investment types.
However, you should note that the selection of ACE 40 investments list is not a ‘personal recommendation’. This means we have not assessed your investment knowledge, your financial situation (including your ability to bear losses), your investment objectives, your risk tolerance, or your sustainability preferences.
You should ensure that any investment decisions you make are suitable for your personal circumstances, and if you are unsure about the suitability of a particular investment or think you need a personal recommendation, you should speak to a suitably qualified financial adviser.
The past performance of an investment is not a reliable indicator of future results, and ii does not guarantee or predict the future performance of the ACE 40 investments list as a whole or the constituent investments.
Risk Warning(s)
The value of your investments may go down as well as up. You may not get back all the money that you invest.
Investing in emerging markets involves different risks from developed markets, in many cases the risks are greater.
The value of international investments is affected by currency fluctuations which might reduce their value in sterling.
Disclosure(s)
All funds listed are the Accumulation version of the fund, where available, where any income generated within the fund is reinvested automatically. Income versions of these funds may also be available for investors looking for income generated to be paid directly into their account.
Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab.
Any changes to the ACE 40 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Review.
Details of all ACE 40 recommendations issued by ii during the previous 12-month period can be found here.
ii adheres to a strict code of conduct. Members of ii staff may have holdings in one or more ACE 40 investments, which could create a conflict of interest. Any member of staff involved in the development of research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, staff involved in the production of the ACE 40 investments list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the ACE 40 investments list. This is to avoid personal interests conflicting with the interests of investors in the ACE 40 investments.