The ‘Greta Thunberg effect’ is surely at play in a list of the year’s most-bought ethical products in which investment trusts dominate.
In a list of the most-bought ethical fund options for 2019, based on customer data from investment platform interactive investor, investment trusts claim the three top spots and take up six places in total in the top 10 table.
Interest in ESG (environment, social and governance) investing has spiked amid greater public concern over climate change, with activists such as Swedish teenager Greta Thunberg helping to keep the “E” in ESG centre stage.
The popularity of investment trusts in the top 10 list from interactive investor, the parent company of Money Observer, could be partly owing to some strategies being very sector specific. For example, The Renewables Infrastructure Group, which tops the table, and Greencoat UK Wind, in second place, both concentrate on renewable energy, while Syncona, with its focus on life sciences, takes the third slot. Greencoat manages a portfolio of onshore and offshore UK wind farms, while the Renewables Group offers exposure to wind and solar energy, as well as battery storage.
Royal London Sustainable World Trust, which invests in growing, innovative companies that have a positive impact for society and show leadership in ESG management, sits in the middle of the table in fourth place. It is followed by Impax Environmental Markets in fifth, then Stewart Investors Asia Pacific Leaders, which as its names suggests invests in businesses that conduct the majority of their activity across Asia, Japan and Australasia. Bluefield Solar Income Fund claims the seventh spot.
A sole ETF, iShares Global Clean Energy UCITS ETF, completes the top 10 table.
Rebecca O’Keeffe, head of investment at interactive investor, suggests that 2019 “has been a year where everyone has finally woken up to the impact of climate change”, meaning that “investors are flocking to investments that offer not only a sustainable return for investors, but more importantly a sustainable future for the planet.”
All 10 funds in the table feature in interactive investor’s ethical iinvestments long list of more than 140 socially responsible and environmental funds, trusts and ETFs, while some feature in the ACE 30, a rated funds list, where each everything is assigned a category – Avoids, Considers or Embraces – to help aid investor selection.
This year, Money Observer launched a hypothetical ethical fund-based model portfolio for investors who would like to bring a more sustainable and responsible approach to their holdings.
Most-bought ethical options in 2019
|Rank||Funds/investment trusts||AIC sector||'ACE' ethical investing style||1-year return
as at 11 December (%)
as at 11 December (%)
|1||The Renewables Infrastructure Group||Specialist: Infrastructure - Renewable Energy||Embraces||23.1||39.2|
|2||Greencoat UK Wind||Specialist: Infrastructure - Renewable Energy||Embraces||23.9||44.2|
|3||Syncona||Specialist: Biotechnology & Healthcare||Embraces||-15.1||72.9|
|4||Royal London Sustainable World Trust||Mixed Investment 40-85% Shares||Considers||21.5||48|
|5||Impax Environmental Markets||Specialist: Environmental||Embraces||23||53.3|
|6||Stewart Investors Asia Pacific Leaders||Specialist||Considers||3.1||22.3|
|7||Bluefield Solar Income Fund||Specialist: Infrastructure - Renewable Energy||Embraces||19.3||51.5|
|8||JLEN Environmental Assets Group||Specialist: Infrastructure - Renewable Energy||Embraces||21||34.6|
|9||Rathbone Ethical Bond||Sterling bond||Considers||12||21.5|
|10||iShares Global Clean Energy UCITS ETF||N/A||Embraces||24.7||40.6|
Notes: Top 10 compiled from data on most-bought ethical options to end of Nov 2019.