Interactive Investor

ii ACE 40 investments:
BMO Sustainable Universal MAP Cautious

ii Ace 40
Asset GroupAsset Sub-GroupInvestment Category
AlternativesMixed assetLow cost

Why we recommend it

The fund is managed by three co-managers in Simon Holmes, Paul Niven and Keith Balmer. They are part of the BMO multi-asset team, which was acquired by Columbia Threadneedle in November 2021. Niven has also become overall head of the combined BMO/CTI M-A team and joined CTI’s AA committee. 

Launched in December 2019, the fund is second in a range of five risk-targeted multi-asset funds and aims to stay within an annualised volatility band of 6%-8% and sit with the IA Volatility Managed sector. The range also has CPI+ return objectives, for which this fund is CPI+2% over 5 years. 

The main lever of the investment process is the strategic asset allocation, which aims to position the portfolios appropriately with a long-term perspective. This is both a quantitative and qualitative process that uses optimisation as a starting point which is then reviewed by the team to apply a qualitative overlay. For the Cautious fund, equities are expected to sit within a range of 42 – 53%. 

The team use internal asset class specialists to run segregated mandates designed for the portfolios using the investment guidelines and parameters set by the Multi-Asset team. For the Sustainable Universal Map range, these funds are sustainably orientated, which are underpinned by a Avoid, Invest, Improve philosophy, conducted by CT’s 20+ strong Responsible Investment team. 

The managers can deliver additional value by diverging from the SAA on a tactical basis, according to the market environment. This is done through a formalised monthly process and results in tactical views across asset classes, sub-asset classes and geographic areas. 

The fund now has a three-year track record, and through February 2023, has achieved an annualised return of 1.16%, trailing the Morningstar Category average’s return of 1.88%, but also trailing its non-Sustainable sister fund, which is amongst the strongest in the peer group since its launch in November 2017.

The UK-based Multi-Asset team has a high level of experience and is well-credentialed. They also have access to the research and resources of the wider Columbia Threadneedle group.  CT apply significant resources and evaluation to asset allocation which the managers highlight as one of the key drivers of returns. Their strategic asset allocation is reviewed on a quarterly basis which differentiates them from others in the marketplace who review on an annual basis.  The fund is kept to a very competitive cost cap of 0.39%, which is more akin to a passively managed strategy.

Ethical criteria

ii ACE sustainable style: Considers. This means the fund carefully considers an often wide range of ethical and/or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.

Fund EcoMarket category: Sustainability Themed. This relates to funds that focus on sustainability-related issues and opportunities as part of their investment strategy, often alongside ethical criteria. Their focus is often around longer term societal and environmental trends.

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 specific sectors or companies from a comparable investment universe.

Currency: Because the fund contains investments outside the UK, performance may be significantly affected by changes in exchange rates.

Information and data compiled to March 2023.

Risk warnings

The information we provide in the ACE 40 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 40 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Review.

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 40 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 40 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 40 investments list.