Terry Smith is among the fund managers who feature in the UK’s first ethical buy list for retail investors, which has been launched by Interactive Investor (II).
The Ace 30 is compiled of 30 funds, investment trusts and ETFs. It follows an ethical investments long list with over 140 ethical investment options launched by II earlier this month.
Terry Smith features on the list with his Fundsmith Sustainable Equity fund, while Liontrust UK Ethical, L&G Ethical Trust and Threadneedle Social Bond are also constituents.
The Rathbone Ethical Bond is the only fund to jointly feature on the Ace 30 and the Super 60, II’s mainstream buy list.
In a press release, CEO Richard Wilson said: “We are immensely proud to have launched the UK’s first retail rated list of ethical funds for those who wish to better align their investments with their own ethical values. In putting forward investment ideas, platforms have a duty to ensure that investors’ interests are at the heart of their thinking.”
Under-represented ethical areas
The Ace 30 list is broken down into three ethical investment styles: Avoids, Considers and Embraces.
Avoids refers to funds that focus on exclusions of companies, sectors or specific business practices; considers refers to funds that consider a range of ethical and/or environmental, social and governance (ESG) issues or themes when balancing positive or negative factors; while embraces refers to funds that focus on companies delivering positive social and/or environmental outcomes.
Head of personal finance at II Moira O’Neill said until the launch of the ethical investments long list in early September, there was little guidance to help investors find ethical propositions. “Now they also have the Ace 30 list of the 30 best in class – thoroughly researched and monitored by our experts,” she said.
“In future, as the ethical investment sector matures, we would expect to be able to add new investments in asset groups and investment categories that are currently under-represented in the Ace 30, such as US and Japanese equities, property and smaller companies.”
Holly MacKay, founder and managing director of consumer finance guidance site Boring Money, added: “There’s a clear and growing customer appetite to invest both for profit and purpose. It’s great to see a new initiative which makes it easier for investors to filter the market and see a manageable shortlist of choices.”
II said the performance of the Ace 30 investments will be monitored on an ongoing basis for any red flags, such as fund manager changes and under performance.
