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Why we recommend it
The fund is managed by Karina Funk and David Powell, who in our opinion, have complementary skills. Funk joined the group in 2009 when the firm she worked for, the ESG-focused Winslow Management, was acquired by Brown Advisory. She spearheads the ESG work for this strategy. Powell, who joined Brown Advisory in 1999, operates out of the firm’s Baltimore headquarters alongside most of its centralized equity research staff. The pair has run this strategy since its 2010 launch in separate accounts.
The managers seek proven, profitable, tough-to-disrupt business models with shares trading at attractive valuations. They expect steady—not blazing—growth and this forms a part of what the team means when they say they look for “sustainable business advantages,” or SBAs. But SBAs also have an explicit ESG element. The simple idea is that sustainability practices such as resource conservation or responsible treatment of customers and employees can spur revenue growth, reduce costs, or increase brand value. Every holding in this portfolio must have a clear SBA thesis.
The managers build a relatively concentrated portfolio of 30 – 40 stocks, and while they aim to reduce single stock risk by limiting individual stock sizes to a maximum holding size of 5%, the portfolio can have significant sector bets.
Fund performance relative to the fund’s benchmark the Russel 1000 Growth Index has been strong, with the fund generally outperforming during periods of market weakness.
The fund benefits from an experienced manager and an established process. The mangers have complementary skills and benefit from the well-resourced analyst team. Although this is an ESG-driven strategy, much of its analytical ethos is straightforward growth-stock investing. The managers seek companies with proven, profitable, tough-to-disrupt business models, and shares trading at attractive valuations.
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.
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: Your investment may be significantly affected by changes in currency exchange rates.
Portfolio concentration: The fund has a concentrated portfolio compared with its benchmark, which is the Russell 1000 Growth index, typically investing in 30-40 stocks.
|Information and data compiled to March 2023.|
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 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 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.