The Motley Fool

I like these 2 ‘sustainable’ investment funds that are smashing the FTSE 100

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Daffodils in the grass
Image source: Getty Images

Sustainable investing has become popular in recent years as the world has become more environmentally aware. Often referred to as socially responsible investing (SRI), or green investing, sustainable investing seeks to generate a financial return while also considering environmental, social, and governance (ESG) factors.

In the past, investing on a sustainable basis often meant sacrificing returns as plenty of these funds underperformed the market. However, in recent years, many have delivered excellent returns for investors. Here’s a look at two sustainable funds that have smashed the FTSE 100 over the last five years.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Liontrust Sustainable Future Global Growth

This Liontrust Sustainable Future Global Growth fund is a fund with a global focus, investing in a broad range of companies from around the world. However, it only invests in companies that meet the team’s rules for environmental and social responsibility. Liontrust’s investment process seeks to identify companies that not only have strong growth prospects, but also offer products or services that make a positive contribution to society. 

In recent years, this fund’s performance has been excellent. Over one year, it’s returned 17.4%, while over three and five years, it’s returned 58.9% and 103.9%, respectively. By contrast, the FTSE 100 has returned just 2.3% over the last year, and 25.5% and 33.1% over three and five years.

One of the reasons this fund has performed so well recently is that it has considerable exposure to the technology sector. However, the fund is also well diversified across many different sectors. Some of its top holdings include Alphabet (the parent company of Google), Autodesk, which makes architecture and construction software, and Ecolab, which offers water, hygiene and energy technologies.

Overall, I think this fund could be a good portfolio addition for those looking to invest sustainably. Fees are 0.93% per year through Hargreaves Lansdown.

BMO Sustainable Opportunities Global Equity

The BMO Sustainable Opportunities Global Equity fund is another globally-focused fund that has performed well in recent years. It’s based on positive, sustainable investment themes, including ESG opportunities. However, it’s not limited to such themes and isn’t subject to negative screening or portfolio exclusions, so it may not be as focused on sustainability as some other funds in the sector. Its goal is to achieve medium- to long-term capital growth, with some income.

Over a one-year investment horizon, the BMO Sustainable Opportunities Global Equity fund has returned 12.5%, while over three and five years, it’s returned 55.1% and 82.8%, respectively. Again, it’s outperformed the FTSE 100 by a wide margin due to its global focus and exposure to the US technology sector. There are plenty of interesting ‘green’ names in the portfolio, such as water technology group Xylem.

All in all, I see this fund as a solid pick in the sustainable sector. It’s also available on the Hargreaves Lansdown platform with an annual fee of 1.29%.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Edward Sheldon owns shares in Alphabet. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Alphabet (C shares). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.