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ii ACE 30 - Unicorn UK Ethical Income Fund

ii ACE 30 investments:
Unicorn UK Ethical Income Fund

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Asset Group Asset Sub-Group Investment Category
Equities UK equity income Smaller company
 

WHY WE RECOMMEND IT

Experienced managers: Fraser Mackersie and Simon Moon have co-managed the fund since its launch in April 2016. Both have been with Unicorn since 2008.

Superior performance: The fund has a volatile profile but has beaten the average fund in the Investment Association’s UK Equity Income sector over the short and medium term. Annualised risk-adjusted returns are in the first quartile of the sector peer group over three years.

The fund is reasonably priced: The ‘B’ accumulation share class levies annual ongoing charges of 0.81% as at 26 July 2019.

 

ETHICAL CRITERIA

ii ACE ethical style: Avoids. This means the fund simply screens out specific sectors considered to be unethical, or stocks whose environmental, social and governance (ESG) scores are below a certain threshold.

Fund EcoMarket category: Negative Ethical. This relates to funds that use clear, sometimes strict and extensive, negative ‘ethical’ screens as their core strategy. They may avoid a significant number of areas on ethical grounds (eg armaments, tobacco, gambling) or may focus on avoiding a smaller number of areas.

How the fund is managed: The fund aims to achieve an historic yield in excess of 110% of the FTSE All-Share index yield, over a three-year period, by investing primarily in UK companies which meet ethical guidelines, as defined by the fund’s authorised corporate director. Selection of such ethical equities will be undertaken on the basis of thorough company analysis, with ethical and socially responsible criteria reviewed at the point of investment and quarterly thereafter.

 

THE RISKS

Ethical screening: In certain market conditions the performance of the fund may differ significantly from others in the peer group that do not exclude ethically screened sectors or companies from a comparable investment universe.

Above-average volatility: The volatility profile is higher than the average fund in the peer group. The fund invests predominantly in medium and smaller-sized companies. It is comparatively small, with less than £30 million under management as at 31 July 2019.

Portfolio concentration: The fund has a concentrated portfolio compared with the FTSE All-Share index. As at 31 July 2019 it was invested in 35 stocks and the top 10 stocks represented 41% of assets under management.

 
Information and data compiled in September 2019.

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Risk warnings

The information we provide in the ACE 30 investments list does not constitute a "personal recommendation". You should ensure that any investment decisions you make are suitable for your personal circumstances and that the ethical style of the investment reflects your personal beliefs.

Past performance of the underlying constituents is not a guarantee of future performance. Remember, the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest.

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.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor.

Any changes to the ii ACE 30 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.

Details of all 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 hold shares in companies mentioned in the ii ACE 30 investments list, which could create a conflict of interest. Any member of staff intending to complete some 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 this ii ACE 30 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 list. This is to avoid personal interests conflicting with the interests of the recipients of this ii ACE 30 investments list.