One year after the launch of our ethical rated list, we add further options for investors.
The enhancements come during Good Money Week (24-30 October), which helps to raise awareness of ethical and sustainable options for consumers
interactive investor, the UK’s second largest direct-to-consumer investment platform, has broadened its ethical ACE 30 rated list, which launched a year ago and was a UK first.
With 14 new additions (see list below), the list has rebranded to ACE 40, with an expanded list now running to 42 funds, ETFs and investment trusts.
Two funds from the original line up have been demoted from the list - AXA Ethical Distribution Fund and EdenTree Amity European fund.
ACE refers to interactive investor’s three ethical styles: Avoids, Considers and Embraces (explained below).
The ACE 40 list follows a similar methodology to its sister list Super 60, and is instrument agnostic, impartial, and includes actively managed and passive solutions across major markets and asset types, to suit different investor needs. However, due to the immaturity of the ethical investment sector, we have been unable so far to find 60 suitable funds.
ACE 40 adds an extra layer of screening to select high-quality ethical options that ii believes offer the best choices for investors across a wide variety of markets. For information on the Governance of ACE 40, see notes to editors.
Dzmitry Lipski, Head of Fund Research, interactive investor says: “It was always our intention to add further options over time as new products launched and gained a footprint. Our ACE list has not only grown, but also matured more than your average one year old – going from 30 to 40 in the space of a year, which shows how far the sector has come.
“While the majority of our ACE list followed the growth pattern we would have hoped for and expected, we say goodbye to AXA Ethical Distribution Fund and EdenTree Amity European Fund, which have failed to thrive since we launched the list. We welcome fourteen exciting new additions to our ACE list, covering Global, UK, Bonds and infrastructure sectors.
“But there’s still some gaps in this yet to mature sector. Income options are there, but thin on the ground due to lack of choice in the sector, and there are only three investment trusts. It is a tough ask finding selections that fit our core, low cost, income, adventurous and smaller companies criteria within our ACE ethical framework, but we will keep scouring the whole marketplace.”
Moira O’Neill, Head of Personal Finance, interactive investor, says: “When we launched our ethical list a year ago, rated lists were rightly going through a period of intense scrutiny. But that didn’t stop us helping customers navigate a little-understood area with greater confidence. Ethical investing remains shrouded in mystery and few others have stepped up to the plate.
“Our rated lists will only be as good as our business model and governance – which we have enhanced even further with an Investment Governance standing committee of our board. Not all of our teams’ selections will be winners, and they are certainly no substitute for doing your own research. But our rated lists are important tools to help investors get started.”
The new additions to ACE 40
|Fund/Asset Class||ii ACE Ethical Style||ii ACE Category|
|Aegon Ethical Equity Fund||Avoids||Adventurous|
|UK Equity Income|
|Janus Henderson UK Responsible Fund||Considers||Core|
|ASI Europe ex UK Ethical Equity Fund||Considers||Adventurous|
|Baillie Gifford Global Stewardship Fund||Considers||Core|
|Baillie Gifford Positive Change Fund||Embraces||Adventurous|
|Montanaro Better World Fund||Embraces||Smaller Company|
|Global Equity Income|
|Baillie Gifford Responsible Global Equity Income Fund||Considers||Core|
|Lyxor Green Bond ETF||Embraces||Low Cost|
|Royal London Ethical Bond Fund||Avoids||Core|
|FP Foresight Global Real Infrastructure Fund||Embraces||Core|
|Royal London Sustainable World Fund||Considers||Adventurous|
|BMO Sustainable Universal MAP Cautious Fund||Considers||Low Cost|
|BMO Sustainable Universal MAP Balanced Fund||Considers||Low Cost|
|BMO Sustainable Universal MAP Growth Fund||Considers||Low Cost|
To view the entire ACE 40 list, and rationales, see here.
|Interactive investor ACE investment styles||Definition|
|Avoids||Funds that focus on simply excluding companies, sectors or specific business practices|
|Considers||Funds that carefully consider an often wide range of ethical and/ or environmental, social and governance (ESG) issues or themes when balancing positive or negative factors.|
|Embraces||Funds that focus on companies delivering positive social and/ or environmental outcomes.|
Low-cost, core, income, small-cap and adventurous options
Even within each of these styles there is great variation as funds apply different levels and combinations of avoidance, positive stock selection and engagement activity aimed at delivering higher business standards. Where a fund manager adopts more than one style, we use the strongest ethical category that applies.
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.