U.K. fund tops this year’s ESG rankings

by Jonathan Adams
ESG rankings

The Stewart Investors India Subcontinent Sustainability fund returned 31.2% in the year through November, according to Morningstar data

A major bet on India as a growth market for low-carbon projects propelled a U.K. fund to the top of this year’s ESG rankings.

The Stewart Investors India Subcontinent Sustainability fund, which is domiciled in Britain but manages its $592 million of client money from Singapore, returned 31.2% in the year through November, according to Morningstar Inc. data. That’s better than any other U.K. fund using ESG investing strategies over the same period, according to Morningstar classifications.

India has a smaller carbon footprint than Europe and the U.S. and is on track to increase investments in infrastructure and manufacturing, according to an analysis provided by Stewart Investors, which oversees a total of $25 billion. That outlook includes significant spending on renewable energy and low-carbon technologies, it said.

According to Sashi Reddy, one of the co-managers of the fund, the economic climate in India means that well positioned companies stand to ‘benefit disproportionately,’ as the country invests in a future that will rely more on renewable energy and less on coal and other fossil fuels.

The biggest holding in the Stewart Investors fund is Tube Investments. The metals company, which makes bikes and is now exploring the market for electric scooters, is owned by Murugappa Group. The fund, which doubled in size during the past year, also has stakes in Aavas Financiers Ltd., a lender to small businesses and consumers, as well as CG Power and Industrial Solutions Ltd., a power-generation designer that was bought last year by Tube Investments.

The Stewart Investors fund is among the few top-performing ESG vehicles to post robust results without relying on tech stocks. At least half the U.K’s 20 top-returning sustainable funds managing more than $268.11 million in 2021 had large positions in one or more of the technology behemoths — Microsoft Corp., Amazon.com Inc, Apple Inc. or Google parent Alphabet Inc., according to Morningstar and corporate fact sheets.



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