Which ethical fund has returned 34% despite COVID-19?
Despite markets being rocked with uncertainty stemming from the COVID-19 pandemic, CFS Ballie Gifford Global Stewardship A fund has managed to return 34.2% since the start of the year to 31 July, 2020, according to data.
FE Analytics data found that this was a huge jump from second place BetaShares Global Sustainability Leaders ETF at 11.7% when looking at equity funds labelled as ‘ethical/sustainable’, within the Australian Core Strategies universe.
During the March sell-off, the CFS Ballie Gifford fund hit a low of -11.2% and has now returned over 16% more than its previous 2020 high of 15.4% in late February.
The fund also beat its global equity sector average, a loss of 3.66%, and its MSCI All Country World Index benchmark, a loss of 3.25%, since the start of the year. Since the fund’s inception in July 2019, it has returned 37.25%.
All five of the top-performing funds were global equity focused.
Pengana International Ethical fund came in third at 5.67%, followed by Pengana International Ethical Opportunity at 5.19%, and CFS Stewart Investors Wholesale Worldwide Sustainability.
Top performing ethical/sustainable funds since start of 2020 to 31 July 2020
Source: FE Analytics
The CFS Ballie Gifford fund’s quarterly report in June said the largest geographic weighting was to North America (58.8%), developed Asia Pacific (12.5%), Europe ex UK (11.8%), emerging markets (10.5%), and the UK (4.1%).
The fund said it held stocks that it believed would “radically” alter the way people shopped (Amazon, JD.com), work (Zoom), learn (Chegg), and play (Spotify and Netflix).
“The coronavirus and resulting lockdown measures have accelerated the adoption of these disruptive services, and in many cases this has resulted in remarkable growth for the companies concerned,” it said.
“Canadian ecommerce platform Shopify continues to be one of the best examples of this. The company was quick to introduce and widen access to new features to help its merchants during the pandemic, such as extended free trials, gift card capabilities and in-store/kerb-side pickup and delivery options.
“These measures contributed to a 62% increase in new store creation on the Shopify platform between mid-March and mid-April when compared to the previous six weeks, leading to a 47% year-on-year increase in revenue for the company in the first quarter.”
On the other end of the scale it was 4D Emerging Markets Infrastructure fund that came in last at a loss of 23.85%, followed by Russell Australian Responsible Investment ETF at a loss of 17.98%.
According to EPFR data, globally last week socially responsible (SRI) or environmental, social, and governance (ESG) mandated equity funds posted a “rare outflow”.
“It is only their second since the beginning of last year and comes as the growing focus on the SRI/ESG theme has intensified the debate over the right definitions, criteria and standards for funds operating in this space,” it said.
“Year-to-date the SRI/ESG Equity and Bond Funds tracked by EPFR have attracted over US$100 ($139.57) billion.”
Over the five years to 31 July, 2020, the top-performing ethical/sustainable fund was Pengana High Conviction Equities at 232.1%.
This was followed by Australian Ethical Emerging Companies at 91.5%, CFS Generation Walter Scott Global Share at 83.8%, UBS IW MSCI Asia APEX 50 Ethical at 66.46%, and Macquarie Walter Scott Global Equity at 63.54%.
Top performing ethical/sustainable funds over the five years to 31 July 2020
Source: FE Analytics
The bottom-performing fund over five years was again Russell Australian Responsible Investment ETF at a loss of 0.26%, followed by Pengana Australian Equities Income at 0.99%.
Recommended for you
Having launched its first active ETF for Australian investors earlier this year, iShares says this has helped the firm reach $50 billion in assets under management in Australia.
Recommending Platinum shareholders to enact the merger with L1 Capital, Morningstar has said it expects the combined firm will be able to moderate outflows and facilitate diversity in product range.
Elanor Commercial Property Fund has appealed to the Takeovers Panel regarding the takeover offer by family office Lederer Group, describing “disclosure deficiencies” in last month’s bidders statement.
Wholesale distribution is experiencing the most active hiring efforts as the decline in financial advisers means fund managers are focusing on high-net-worth investors and wealth managers instead.
