Sustainable-themed global equity funds outperformed the MSCI All Countries World index during the chaos wrought after Donald Trump announced his ‘Liberation Day’ tariffs, according to data provided by FE fundinfo.
On 2 April, President Trump imposed a minimum 10% tariff on all exporters to the United States and additional reciprocal duties on roughly 60 nations with the largest trade imbalances with the US. Subsequently, Trump announced a 90-day pause on the reciprocal duties and added a temporary exemption for some electronic devices, including smartphones and computers.
While global markets have begun to recover, with the S&P 500 surging 5.6% and the Nasdaq jumping over 8% on the day that Trump announced a pause on his reciprocal tariffs, US and global markets are widely viewed as uncertain and unstable.
PA Future has taken a look at the funds that outperformed during the market turmoil. Between 2 and 10 April, the Schroder Global Sustainable Growth fund performed 3.7 percentage points better than the MSCI ACWI index’s return of -6.7%, with the CT Sustainable Global Equity Income 4 fund outperforming by 3.5 percentage points, and the JOHCM Regnan Sustainable Water and Waste fund, the Premier Miton Global Sustainable Optimum Income fund and the CT Responsible Global Equity 4 Inc fund performing 3.2 percentage points better.
Top five sustainable global equity funds ranked by performance since ‘Liberation Day’
Dan Coatsworth, investment analyst at AJ Bell, suggested pointed to bulk investments in defensive parts of the market within sustainable funds – sectors that should see steady demand regardless of the state of the economy.
“For example, Jupiter Ecology’s biggest holding is Republic Services, which is active in waste and environment solutions. Emptying your wheelie bins and making sure waste is treated, disposed of safely or recycled are essential services day in, day out,” Coatsworth explained.
Also read: With tariffs shaking markets, what do investors need to consider?
“While recycling volumes do have exposure to economic fluctuations, the core bread and butter of Republic Services’ work is non-discretionary spend. Investors raced to find these types of businesses during the market sell-off as they are classic examples of safe havens in times of trouble.”
Market wobbles also drive investors to seek exposure to companies with quality characteristics, such as high returns on the money they spend on their business, a strong balance sheet or a market-leading position, he continued.
“Many companies that rank highly for sustainability are ones in a great shape and have the financial resources to ensure they do the right thing for society where possible. Investors are happy to pay a premium for quality stocks in a wobbly market as they are seen to be the ones who will stay afloat while weaker players struggle.”
Below is an overview of the top five funds, using FE Fundinfo data (accurate as of 22 April).
Schroder Global Sustainable Growth
The £244.3m Schroder Global Sustainable Growth fund is managed by Charles Somers and Scott MacLennan, both since 2022. More than 40% of its holdings are in US equities, with the top holdings including Microsoft, Alphabet, SAP SE, Banco Bilbao Vizcaya Argentaria and Booking Holdings Inc.
The fund delivered a bottom quartile over the past year, but had a second quartile ranking over three and five-years.
Performance: 1 year: -6.9%, 3 year: 12.8%, 5 year: 65.2%
CT Sustainable Global Equity Income
Columbia Threadneedle’s Sustainable Global Equity Income fund holds £138.4m in AUM, and has been managed by Nick Henderson since 2023. Over 60% of its holdings are in North American equities, with the top holdings including Microsoft, Linde, Broadcom, Daiwa House and Gen Digital.
The fund aims to achieve income with capital growth over the long term (five years or more), seeking to provide an income yield higher than the MSCI All Country World Index over rolling three-year periods, after the deduction of charges.
It currently sits in the third quartile for performance compared with its peers.
Performance: 1 year: -0.6%, 3 and 5 year N/A (fund launched in 2023)
Regnan Sustainable Water and Waste
Launched in 2021, the Regnan Sustainable Water and Waste fund has £224.3m in AUM and is managed by Bertrand Lecourt and Saurabh Sharma. Over 64% of assets are in North American equities, with the largest holdings including Waste Management, Republic Services, Pentair, Waste Connections and Xylem.
The fund aims to generate capital growth over rolling five-year periods and to pursue a sustainable objective by investing in companies that provide solutions to the global water and/or waste-related challenges.
It has performed better than the sector average since launch and currently sits in the top quartile for performance compared with its peers.
Performance: 1 year: -2.1%, 3 year: 17.2%, 5 year: N/A (fund launched in 2021)
Premier Miton Global Sustainable Optimum Income
Geoff Kirk and Duncan Goodwin co-manage the £29m Premier Miton Global Sustainable Optimum Income fund – Kirk since 2018, and Goodwin since 2020. 100% of the fund is focused on equities, with Microsoft, Visa, Linde, London Stock Exchange Group and HDFC Bank being its top holdings.
The fund aims to achieve a yield of 6% per annum, together with the prospect of capital growth over five years or more. The investment adviser also aims for at least 70% of the fund to be invested in companies and other assets that are environmentally and/or socially sustainable, as per the Sustainability Focus label the fund adopted under the Financial Conduct Authority’s Sustainability Disclosure Requirements.
However, the fund has lagged behind the sector average for the last three years and has remained in the bottom quartile in terms of performance over the last five years compared with its peers.
Performance: 1 year: -8.4%, 3 year: -9.9%, 5 year: 29.5%
CT Responsible Global Equity
Columbia Threadneedle’s second fund in the top five performing funds during the tariff dispute – the CT Responsible Global Equity fund – has been managed by Jamie Jenkins since 2014, who was joined by Nick Henderson in a deputy management role in 2016. The fund has £1.1bn in AUM, of which over 75% is invested in US equities. Its top holdings are Microsoft, Apple, NVIDIA, Mastercard and Linde.
The only stated objective of the fund is to provide long-term capital growth. However, it has ranked in the bottom quartile for performance over the last three years.
Performance: 1 year: -9.3%, 3 year: -0.3%, 5 year: 42.9%
