And the winners of the Ethical/SRI awards are...
BEST EQUITY FUND
1-year return: 7.0%
3-year return: 80.6%
JPM Asia Growth is a relative newcomer to our awards and is doing it in style this year by taking two top spots. It is not only our Best Asia Pacifi c fund, climbing from runner-up in the category in 2018, but also lifts the Best Ethical/SRI Equity fund crown for its consistently solid performance.
The £309 million fund, which also entered our Rated Funds for 2019, benefits from the strong management of Joanna Kwok and Mark Davids, who assumed control of this strategy four years ago but have two decades of investment experience each.
Their process follows JPMorgan’s emphasis on quality and growth stocks. The pair seek firms that boast quality franchises and consistent earnings streams and have delivered sustainably high returns over time, investing in up to 60 of their best ideas. They are well supported by sector and country specialists within the firm’s 100-strong emerging markets and Asia Pacific equities team.
Kwok and Davids believe Asia still offers an attractive investment case as the opportunity set continues to evolve. They have a preference for selected financials, consumer discretionary and technology stocks.
Benefiting from strong managers
BEST MIXED ASSET FUND
1-year return: 11.7%
3-year return: 49.4%
Royal London Sustainable World lifts the Best Ethical/SRI Mixed Asset fund award for the sixth year running. It was also our Best Mixed Asset Higher Risk fund in 2015 and highly commended in the same category in 2016 and again this year.
It has delivered first-quartile returns over all time periods, with one of the best consistency records around. Assets grew by 75% over the past year, from £408 million to £713 million.
A Rated Fund since 2013, it has been run by Mike Fox since its inception in 2009. He can invest in equities and bonds, but has tended to keep equities close to the maximum of 85%. He favours growing, innovative companies that are having a positive impact on society. This is supplemented by companies showing leadership in environmental, social and governance (ESG) management. Fox believes this approach makes the fund less volatile than others with a wider remit.
The economic environment has a marginal influence on his choice of shares. He is primarily interested in innovation and structural growth rather than changing the fund to reflect shorter-term economic conditions.
Delivering first-quartile returns
BEST BOND FUND
1-year return: 3.4%
3-year return: 19.6%
Rathbone Ethical Bond is another serial winner, having notched up a five-year winning streak in this category given its consistently good returns from a traditional socially responsible investment (SRI) strategy. It has also been a Rated Fund since 2013.
The fund’s assets broke through the £1 billion market over the past year on the back of a modest uptick in value and a steady stream of inflows, as investors have recognised its income-producing credentials. It aims to produce a regular, above-average income, and yields 4.2% at present.
Bryn Jones, head of fixed income at Rathbones, has run the fund since 2004. Assistant manager Noelle Cazalis joined him in 2016. They predominantly invest in investment-grade bonds and use both positive and negative screening to make their selections.
They seek to identify economic trends and thematic ideas and then look for the best bonds to buy within that framework. The use a ‘four Cs plus’ approach to assessing credit quality. This looks at character, capacity, collateral and covenants, with the ‘plus’ being conviction.
A solid five-year winning streak