Interactive Investor

ii ACE 40 investments: 
VT Gravis Clean Energy Income Fund

ii Ace 40
Asset GroupAsset Sub-GroupInvestment Category

Why we recommend it

The fund is managed by William Argent who joined Gravis in 2017 and has been investing in the listed infrastructure sector since 2006.

This fund offers a balanced solution to an energy led investment in that it targets multiple objectives including the desire to generate income, to preserve capital and to target capital growth. The fund invests in diversified portfolio of global listed securities, including YieldCo’s and investment trusts, and invests in companies that are involved in the operation, funding, construction, generation and supply of clean energy. A minimum of 80% of the portfolio is exposed to operational (availability based or contracted) assets, including renewable energy assets such as wind, solar and hydro, while a maximum of 20% is exposed to thematic companies involved in clean energy and energy efficiency. In respect of the latter, companies must have a demonstrable track record of generating operating profits.

The resultant portfolio has a distinct mid- and small-cap bias however the income focus and asset mix results in a portfolio that typically outperforms during periods of market weakness. From an income perspective the fund has a net yield of around 4.5%.

The fund’s objective is distinct when compared to most funds in the space which typically offer a higher growth profile. This is because, for the most part, companies that operate in this space are younger and developing and reinvestment of earnings is much more common than paying a dividend as the market for clean energy grows rapidly.

The allocation to YieldCo’s, which are publicly traded companies that are focused on returning cash flows generated from renewable energy assets to shareholders, helps support the fund’s income objective and the aspiration for a less volatile return profile as the long-term nature of the underlying contracts helps mitigate development risk and price uncertainty.

Ethical criteria

ii ACE sustainable style: Embraces. This means the investment trust adopts a targeted or proactive approach to ethical investing, in an effort to make a positive impact and/or environmental outcomes.

Fund EcoMarket category: Environmentally Themed. This applies to funds that significantly integrate environmental issues into their investment strategies, sometimes alongside ethical avoidance criteria. Their focus is often around longer term environmental and resource related issues.

The risks

Environmental focus: 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.

Portfolio concentration: The fund has a highly focused portfolio. The fund typically holds around 30 stocks.

Currency: Because almost half of the fund’s investments are not quoted in sterling, performance may be affected by changes in exchange rates.

Information and data compiled October 2020.

Risk warnings

The information we provide in the ACE 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 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 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 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 investments list.