Interactive Investor

iShares Global Clean Energy ETF keeps place in ii ACE 40

7th July 2021 12:57

Myron Jobson from interactive investor

interactive investor retains ETF in rated list of ethical investments following a formal review.

On 24 March, interactive investor, the UK’s second largest direct-to-consumer investment platform, placed its ‘ACE 40’ rated iShares Global Clean Energy ETF (LSE:INRG) under formal review.

It followed news that S&P Dow Jones would be enhancing the methodology of its Global Clean Energy Index, the underlying index for the ETF to reduce constituent concentration, ease liquidity limitations, and improve index replication. The changes came into effect on 19 April 2021.

The formal review has been in line with interactive investor’s ACE 40 methodology, which is monitored continuously for ‘yellow card’ events. Examples of such events include, but are not limited to, change in investment methodology, fund manager moves, and a major re-rating from external or internal sources. 

Dzmitry Lipski, head of funds research, interactive investor, says: “iShares Global Clean Energy ETF has been a member of our ACE 40 rated ethical investments list since launch in October 2019, as a low-cost option within the specialist low-cost category.

“We have decided to retain iShares Global Clean Energy ETF on our ACE 40 list following an extensive review of changes to its methodology. The ETF has increased the number of holdings of its clean energy index from 30 to 82, in a move designed to reduce constituent concentration, address liquidity risk and improve index replication.

“We view the recent changes to the index as positive as they add diversification and improve the liquidity profile of the index portfolio. However, we note the index now includes companies which are not pure-play clean energy stocks, meaning there is a potential for exposure to be diluted. We reviewed other clean energy ETFs and concluded that iShares Global Clean Energy ETF remains the best option due to its broad, diversified exposure to the clean energy theme, improved underlying liquidity and its proven track record.”

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