ii ACE 40 review: full-year 2020

Here’s how interactive investor’s selection of ethical funds performed over the past 12 months.

Since the beginning of 2020, the majority of active funds in interactive investor’s ACE 40 list of ethical funds have performed in line with expectations, both in absolute and relative terms. Long-term performance has been particularly strong. Indeed, many have managed a significant recovery from the market turbulence across the majority of asset classes over the year.

Throughout 2020, 84% of ACE 40 active funds have delivered positive returns and, over the quarter as well as over the five years to 31 December 2020, all active funds delivered positive returns.

Over the 12 months to 31 December, the top performers from ii’s ACE 40 list included: iShares Global Clean Energy ETF (LSE:INRG), returning 132.83%, Baillie Gifford Positive Change, which returned 80.08%, and Baillie Gifford Global Stewardship, generating a 70.96% return over the period.

Bottom performers included: Unicorn UK Ethical Income, down 14.63%, BMO Responsible UK Income returning -9.55%, and L&G Ethical, which returned -8.33% due to a difficult market environment in the UK throughout the crisis.

Most rated investment trust discounts have remained consistent or improved over the year, and none of the trusts are currently at a significantly geared level (+30%) that would cause concern. The majority of index funds have kept tight tracking errors over the long term, in line with expectations, and are below their peer group averages over the year. 

During the annual review in October 2020, the list was expanded from ACE 30 to ACE 40, with 14 new options added to the list and two funds removed due to loss of conviction. Following a comprehensive review of ethical fund options available to retail investors, we found a greater number of funds with sufficiently long track records to consider endorsing for our rated list. The ACE 40 list continues to aim to provide investors with a set of high-quality choices among the available universe of ethical funds, across a broad variety of markets and investment types.

• Want to invest ethically? ii’s ACE 40 list of ethical investments can help

Top five ii ACE 40 funds in 2020

Source: Morningstar. Total returns in sterling

Bottom five ii ACE 40 funds in 2020

Source: Morningstar. Total returns in sterling

Most-traded funds on the ii platform in 2020

Changes to the ii ACE 40 list (under review/developments)

ii ACE 40 Annual Review 
Following our annual review in October 2020 the ii ACE 30 has expanded to the ii ACE 40. Find out more here.  

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