Important information - 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. The selection of these funds does not constitute a personal recommendation. We have not assessed your personal circumstances or preferences.
The ii ACE 40 makes investing sustainably easy.
From our list of more than 140 sustainable investment options, we have picked out what we believe to be the 40 best-in-class funds, investment trusts and exchange-traded funds (ETFs). These offer the highest quality across a wide variety of markets.
You can find out how each one attained ii rated status by reading our Methodology and FAQs.
Our ii ACE 40 selections are:
- High-quality companies chosen from the widest possible range of sustainable investments
- From different sectors and regions, with risk options from core to adventurous
- Designed to suit ALL investors
- Chosen for their potential to deliver strong financial performance
- Managed in a genuinely sustainable manner – there is no ‘greenwashing’ of information that aims to mislead about the environmental credentials of a company
Past performance is not a guarantee of future performance.
The ACE 40 list offers a filtered selection of collective investment vehicles for all investors, new or experienced. We aim to provide a menu of high-quality choices across a broad variety of markets and investment types.
Tools
Sustainable growth portfolio – designed to give you an idea about how you can build your own balanced sustainable portfolio.
How to use the ii ACE 40
The ii ACE 40 is sorted into asset groups, investment categories and ACE sustainable styles.
Asset groups include global equities and fixed-income options, while the investment categories suit the type of investor you are. These range from low cost – for those looking to control what they are paying – to smaller company and adventurous, for investors keen to add higher-risk options to a balanced portfolio.
The investment categories follow a similar structure to our Super 60, but the limited range of sustainable options available means some categories are currently blank. We plan to add extra options over time as new sustainable investments are launched or build up a good track record of performance.
ACE sustainable styles explained
Each fund is given an ACE sustainable style. Where a fund’s manager adopts more than one, we use the strongest that applies:
Avoids.
Funds that focus on simply excluding companies, sectors or specific business practices.
Considers.
Funds that carefully consider an often wide range of sustainable and/or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.
Embraces.
Funds that focus on companies delivering positive social and/or environmental outcomes.
Display ii ACE 40 investments by:
Asset Groups
ii ACE 40 Equities
ii ACE 40 Fixed Income
ii ACE 40 Alternatives
ii ACE 40 Equities
UK equities
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| Royal London Sustainable Leaders C Acc | Core | Considers | find out more | trade |
| Aegon Ethical Equity | Adventurous | Avoids | find out more | trade |
| Liontrust UK Ethical 2 Net Acc | Adventurous | Considers | find out more | trade |
| UBS ETF MSCI UK IMI SRI | Low cost | Avoids | find out more | trade |
L&G Ethical Trust Fund has been removed. Find out more
UK equity income
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| BMO Responsible UK Income 2 Acc | Core | Considers | find out more | trade |
| Janus Henderson UK Responsible Income | Core | Considers | find out more | trade |
| Unicorn UK Ethical Income B Acc | Smaller company | Avoids | find out more | trade |
| Trojan Ethical Income X Acc | Adventurous | Avoids | find out more | trade |
Global equities
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| UBS ETF MSCI World SRI USD A dis GBP | Low cost | Avoids | find out more | trade |
| BMO Responsible Global Equity 2 Acc | Core | Considers | find out more | trade |
| Baillie Gifford Global Stewardship | Core | Considers | find out more | trade |
| Montanaro Better World | Smaller company | Embraces | find out more | trade |
| Impax Environmental Markets Ord | Adventurous | Embraces | find out more | trade |
| Baillie Gifford Positive Change | Adventurous | Embraces | find out more | trade |
| Fundsmith Sustainable Equity I Acc | Adventurous | Considers | find out more | trade |
| Baillie Gifford Responsible Global Equity Income | Core | Considers | find out more | trade |
The classification of Impax Environmental Markets has changed. Find out more
Emerging markets
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| iShares MSCI EM SRI ETF USD Acc GBP | Low cost | Avoids | find out more | trade |
| Stewart Investors Glbl EM Sust B Acc GBP | Core | Considers | find out more | trade |
Asian equities
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| UBS ETF MSCI Pacific SRI USD A dis GBP | Low cost | Avoids | find out more | trade |
| Pacific Assets Ord | Core | Considers | find out more | trade |
| Impax Asian Environmental Markets IRL X | Adventurous | Embraces | find out more | trade |
European equities
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| Vanguard SRI European Stock GBP Acc | Low cost | Avoids | find out more | trade |
| Liontrust Sust Fut Eurp Gr 2 Net Acc | Core | Considers | find out more | trade |
| M&G European Sustain Paris Aligned Fund | Adventurous | Considers | find out more | trade |
| Montanaro European Income | Income | Considers | find out more | trade |
EdenTree Amity European Fund has been removed. Find out more
abrdn Europe ex UK Ethical Equity Fund has been removed. Find out more.
US equities
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| iShares MSCI USA SRI ETF USD Acc GBP | Low cost | Avoids | find out more | trade |
| Brown Advisory US Sust Gr GBP B Inc | Core | Considers | find out more | trade |
ii ACE 40 Fixed Income
Global bonds
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| Lyxor Green Bond | Low cost | Embraces | find out more | trade |
| PIMCO GIS Global Bond ESG Instl GBPH Inc | Core | Considers | find out more | trade |
Sterling bonds
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| Liontrust Sust Fut Corp Bd 2 Grs Inc | Core | Considers | find out more | trade |
| Royal London Ethical Bond | Core | Avoids | find out more | trade |
| Rathbone Ethical Bond I Acc | Adventurous | Considers | find out more | trade |
| Threadneedle UK Social Bd Z Grs Acc£ | Adventurous | Embraces | find out more | trade |
The classification of Rathbone Ethical Bond has changed. Find out more
Threadneedle UK Social Bond is under review. Find out more
ii ACE 40 Alternatives
Specialist
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| iShares Global Clean Energy ETF USD Dist GBP | Low cost | Embraces | find out more | trade |
| FP Foresight Global Real Infrastructure | Core | Embraces | find out more | trade |
| VT Gravis Clean Energy Income C GBP Acc | Income | Embraces | find out more | trade |
Formal review concluded. iShares Global Clean Energy ETF has been retained. Find out more
Syncona has been removed. Find out more.
Mixed asset
Name | Investment Category | ii ACE sustainable style | Selection rationale | Invest now |
| BMO Sustainable Universal MAP Cautious | Low Cost | Considers | find out more | trade |
| BMO Sustainable Universal MAP Balanced | Low Cost | Considers | find out more | trade |
| BMO Sustainable Universal MAP Growth | Low Cost | Considers | find out more | trade |
| Royal London Sustainable Div C Acc | Core | Considers | find out more | trade |
| Royal London Sustainable World | Adventurous | Considers | find out more | trade |
| Climate Assets B GBP Acc | Adventurous | Considers | find out more | trade |
AXA Ethical Distribution Fund has been removed. Find out more
Removal of abrdn Europe ex UK Ethical Equity
Iain Hewitt and Sarah Norris assumed responsibility for this fund in April 2018 and were joined by Roseanna Ivory in June 2020 and by Sasha Kachanova in February 2021. Compared to peers however their fund management experience remains limited. The fund has typically displayed a growth style bias and a market cap that is slightly lower than that of peers and the index. Despite the fund's growth style, which should have until recently been a tailwind to performance, performance over their tenure has been lacklustre with the fund only managing to deliver strong relative outperformance in 2020. Overall we believe that there are stronger fund options available in this sector and have therefore recommended the removal of this fund from the ACE 40 fund list.
(22 June 2022)
Removal of Syncona Limited
We feel that the level of risk the Trust displays is elevated relative to the benefits. Given the niche nature of the Trust it makes it hard to discern if the team and structure are the best available options to access this area of the market. Investor returns are also heavily reliant on sentiment rather than NAV performance, with big swings in both the premium and discount in recent times. The risk in the underlying investments is also significant, with a highly concentrated portfolio of companies involved in an area where outcomes of clinical trials can swing performance heavily one way or another. It is our recommendation that the Trust be removed from the ACE 40 fund list.
(22 June 2022)
Threadneedle UK Social Bond Fund under review
Following the news that Simon Bond, manager of the Threadneedle UK Social Bond fund will retire in 2023, we are placing the fund Under Review. Bond has been at Columbia Threadneedle for more than 19 years and has been in the investment industry for more than 37 years. As part of his transition to retirement he is stepping back from fund management responsibilities on 30th June 2022, but will remain with the business until March 2023 to help oversee the handover of management responsibilities. He will also continue as a member of the fund’s established social advisory committees. Tammie Tang, who currently works alongside Bond as the fund’s deputy manager, will take over as lead manager. She has been with the Group for 10 years and been deputy on the fund for the last four. We will meet with the managers in due course to review these changes.
(20 May 2022)
Syncona Limited retained
We have decided to remove Syncona from under formal review and retain its rating on our ACE 40 list following an extensive review of the trust’s approach and performance.
The trust was typically trading on relatively high premium and since addition to the ACE 40 in Autumn 2019 its share price has been volatile and premium almost eroded, which was disappointing and triggered our under review process.
We have conducted a careful review of the risks associated with the trust, including the approach of the manager and portfolio composition as well as assessment of the sector.
Syncona has a strong sense of social purpose through the companies it builds and finances to provide transformational treatments for patients with a goal to extend and enhance human life.
Managed by a highly scientific and experienced management team, the trust aims to achieve superior long-term capital appreciation by focusing on founding, building and funding a portfolio of global leaders in life sciences.
As companies go through various stages of clinical trials to product approval, the managers investment horizon is very long term and relies on building a high-conviction portfolio of high growth companies diversified across therapeutic areas and the development cycle.
But investors should note that as the portfolio is invested mainly in unquoted companies with significant exposure to three public holdings, the returns are likely to be volatile and substantially deviate from market indices.
We remain positive on the trust outlook and see it a strong choice for adventurous investors prepared to tolerate high volatility in the short term but potentially reap rewards over the longer term.
Given its high portfolio concentration, exposure to unquoted companies and absence of a formal premium/discount control mechanism the trust should form only a small, satellite holding in a well-diversified portfolio. This trust has always been classed as an ‘Adventurous’ ACE 40 option, and will very much continue to be so.
(29th October 2021)
Syncona Limited under review
In line with our stated methodology Syncona, a member of the ii ACE 40 list, has been put under review due to concerns regarding the trust’s performance. The investment trust, which aims to achieve superior long-term capital appreciation from investing in life science companies, has been very volatile in share price terms and posted negative returns year to date which has damaged its long-term track record. As a result of the pandemic, two of the trusts listed holdings’ (Freeline and Autolus) drug trials have been pushed back which has contributed to the portfolio underperformance. We will be investigating its performance and assess whether the trust continues to be appropriate for our investors and be included in the ii ACE 40 best ideas list.
(11th August 2021)
iShares Global Clean Energy ETF Retained
We have decided to remove iShares Global Clean Energy ETF from under formal review and retain its rating on our ACE 40 list following an extensive review of changes to its methodology. The exchange-traded fund (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.
7 July 2021
Reclassification of Rathbone Ethical Bond Fund
We changed the category of Rathbone Ethical Bond Fund on the ACE 40 from ‘income’ to ‘adventurous’. The fund’s objective is to deliver a greater total return than the IA Sterling Corporate Bond sector, after fees, over any 5 year rolling period. Although the fund delivers reasonable level of income, this is not its primary objective and in certain circumstances it could be sacrificed to support total returns, meaning it is not truly align with our criteria for income strategies. Given its total return objective and risk characteristics, we believe the fund is more suitable to our adventurous category.
(26 February 2021)
Removal of L&G Ethical Trust Fund
We have decided to remove L&G Ethical Trust from our ACE 40 sustainable rated list because the fund’s mandate that sets out how the money is to be invested is changing. Until now, the fund has tracked the FTSE 350 Index and is a UK Equity, Low Cost option within the ACE 40. On the 28 January 2021 changes will take effect for the fund to have a global mandate, track the MSCI World SRI Index and be renamed Legal & General MSCI World Socially Responsible Investment (SRI) Index Fund. Following these changes the fund will no longer be appropriate for its current category within the ACE 40 and therefore removal from the list is appropriate.
(28 January 2021)
Removal of AXA Ethical Distribution Fund
Following our annual review, we have decided to remove the fund from our ACE 40 List. The fund has had a disappointing period of performance relative to its peers and we, unfortunately, have lost conviction in its ability to meet its long-term performance objective. The portfolio only allocates between UK Gilts and UK equities with a bias to mid and small-cap stocks, which will significantly impact the fund’s absolute and relative performance.
(26 October 2020)
Impax Environmental Markets Trust
The decision to reclassify Impax Environmental Markets Trust from Global Equity/Smaller Company to Global Equity/Adventurous is in-line with our stated methodology. We have conducted a careful review of the risks associated with the trust, including the style of the manager and portfolio positioning as well as assessment of the sector. We maintain our conviction in the manager and his approach focusing on companies delivering environmental solutions but due to the specialist nature of the strategy Adventurous risk category is more appropriate.
(26 October 2020)
Removal of EdenTree Amity European Fund
While we continue to have a high regard for the firm and the team, the fund has been struggling to achieve its performance objectives in recent years, and we have therefore decided to remove it from our ACE 40 List. The contrarian and value style of the fund has contributed to the fund’s comparatively disappointing performance against peers. We are also conscious of the possibility of longer recovery periods for value investing.
(26 October 2020)
Reclassification of Syncona Limited
The decision to reclassify Syncona Limited from Specialist/Smaller Company to Specialist /Adventurous is in-line with our stated methodology. We have conducted a careful review of the risks associated with the trust, including the style of the manager and portfolio positioning as well as assessment of the sector. We maintain our conviction in the manager and his approach focusing on life science companies but due to the specialist nature of the strategy Adventurous risk category is more appropriate.
(26 October 2020)
Disclaimer(s)
The Super 60 / ACE 40 investments list has been selected by our 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 Super 60 / ACE 40 investments list is not investment advice or a ‘personal recommendation’. This means neither we, nor Morningstar, have 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. Neither ii nor Morningstar are responsible for any trading decisions, damages or other losses related to the Super 60 / ACE 40 investments list.
The past performance of an investment is not a reliable indicator of future results, and ii or Morningstar do not guarantee or predict the future performance of the Super 60 / ACE 40 investments list as a whole or the constituent investments.
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, investment trust or ETF. Simply click on the asset’s name and then the performance tab.
Any changes to the ii Super 60 / ACE 40 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Review.
Details of all Super 60 / 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 Super 60 / 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 Super 60 / 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 Super 60 / ACE 40 investments list. This is to avoid personal interests conflicting with the interests of investors in the Super 60 / ACE 40 investments.
Not yet an ii customer?
You can buy the ii ACE 40 investments in any of the accounts we offer.