Ethical and sustainable funds continue to be among the best performers in the latest rebalance of the Crown Ratings, which are published today by global fund data and technology leader, FE fundinfo.
With 17 funds gaining the highest 5-Crown rating, BNY Mellon’s Sustainable Global Equity and Sustainable Real Return, Jupiter’s Global Sustainable Equities and Montanaro’s World funds have all achieved the prestigious status at the first time of asking.
Charles Younes, Research Manager at FE Investments, comments:
“The strong performance of sustainably-focused funds has largely come about from a combination of favourable market conditions and growing interest in ESG investing from both investors, who are looking beyond returns and wanting to know where their money is going, and institutions and fund groups who are looking to diversify their propositions.
“The technology sector, where a lot of sustainable funds are concentrated, continues to perform well as many economies are adopting a hybrid home/office working approach as they emerge from the Covid-19 pandemic. Additionally, as ESG investing has taken off, many sustainable funds are now coming into maturity, having been launched three or more years ago and are now eligible for a Crown rating. That so many have been rated so highly and so soon, is testament to the strength of their proposition and their ability to capitalise on current market conditions.”
5-Crown rated funds
The total number of funds with the highest 5-Crown rating now stands at 397 in this rebalance, with 15 of these gaining the status for the first time and a further 9 moving from the lowest 1-Crown to the highest level.
Meanwhile the impact of the market rotation from growth into value strategies throughout 2021 has seen 125 funds losing their 5-Crown rating. Among these were six funds from Liontrust and five from Baillie Gifford (both star performers in the January rebalance) who were affected by this shift.
|Group||New 5-Crown rated fund|
|AllianceBernstein (Luxembourg) S.a r.l.||AB Financial Credit Portfolio|
|Allianz Global Invtrs GmbH(UK)||Allianz Index-Linked Gilt|
|BlackRock||BlackRock ACS Lifepath 2034-2036|
|BlackRock||BlackRock ACS Lifepath 2037-2039|
|BlackRock||BlackRock ACS Lifepath 2040-2042|
|BNY Mellon Fund Managers Ltd||BNY Mellon Sustainable Global Equity|
|BNY Mellon Fund Managers Ltd||BNY Mellon Sustainable Real Return|
|Cohen & Steers||Cohen & Steers European Real Estate Securities|
|Cohen & Steers||Cohen & Steers Global Preferred Securities|
|Federated Hermes||Federated Hermes Unconstrained Credit|
|Jupiter Unit Trust Mgrs Ltd||Jupiter Global Sustainable Equities|
|Montanaro Asset Management Limited||LF Montanaro Better World|
|Montanaro Smaller Co Plc||Montanaro Better World|
|PIM Capital Management||PIMCapital IZA Global Balanced|
|T. Bailey Fund Srvs Ltd (ACD)||Ocean UK Equity|
|Threadneedle Investment Services Limited||Threadneedle Global Focus|
|Threadneedle Investment Services Limited||Threadneedle Managed Bond Focused|
Sectors and groups
Among the sectors, the bond markets have performed particularly well over the past six months, with the IA Global EM Bonds sector seeing 9 out of its 31 funds (29%) gaining a 5-Crown rating, while the IA Global Government bond (25% of its funds receiving a 5-Crown rating) and the IA USD Corporate Bonds (20%) and IA USD High Yield Bonds (20%) also saw many of their funds become 5-Crown rated as well.
At the other end of the spectrum, the Crowns rebalance also reveals that income strategies continue to struggle. Among the worst performers were the IA UK Equity Income sector with just 5% of its funds gaining the highest rating and the IA Global Equity Income sector with 4%. The IA North American Smaller Companies sector meanwhile, which was the previous best performing in January, has also fallen significantly from having 30% of its funds 5-Crown rated in January, to just 10% in July.