Morgan Stanley tops Responsible Ratings Index in June

Top 25 funds in this month’s RRI

In March, ESG Clarity reported that data provider MSCI would be downgrading many of its ESG funds.

Changes to its methodology meant 31,000 funds received a one-off ratings downgrade as MSCI looked to raise the requirements for a fund to be assessed as AA or AAA, and improve stability and transparency in fund ESG ratings.

In a statement, MSCI said removing the adjustment factor would mean a fund’s ESG ratings would be “based solely on the ESG scores of its underlying holdings”, while the decision to exclude swap-based funds comes as it “actively explores” methods to provide a rating for swap-based ETFs based on the underlying index.

The changes will mean the proportion of funds rated as AA will fall from 32.8% to 22.4% and those rated AAA will fall from 19.9% to 0.2%.

As a result, ESG Clarity has rebalanced its Responsible Ratings Index (RRI) earlier than planned and, while index funds rarely are chart-topping, changes to the top spots dominated by active funds can clearly be seen.

Most notably, Royal London’s Sustainable World Fund has dropped from first to 10th place to be replaced by Morgan Stanley’s Global Brands Fund – a £17.2bn strategy weighted heavily to the US.

The RRI was launched in 2020 to provide a one-stop-shop for readers looking for the top-rated ESG funds. It uses research from our in-house data team at Mark Allen Financial to collate the sustainable ratings from housings such as Morningstar, MSCI and Square Mile and find the best-rated funds. To compare this month’s ratings (below) with those from the last rebalancing in January 2023, click here.

Here are the top 25 funds in June 2023:

NameRRIMorningstar Sustainability RatingMSCISquare MileGlobal CategorySustainable Investment - OverallFund Size £M
MS INVF Global Brands 555Global Equity Large CapNo17213
BGF ESG Multi-Asset 555Moderate AllocationYes5741
LF Lindsell Train UK Equity 555UK Equity Large CapNo4638
Nordea 1 - Alpha 10 MA Fd 555MultialternativeNo3989
Nordea 1 - Alpha 15 MA Fd 555MultialternativeNo3907
LF Ruffer Absolute Return555Flexible Allocation3670
Royal London Sustainable Div 555Moderate AllocationYes3353
CCLA COIF Charities Investment 555Aggressive Allocation3290
Royal London Sustainable World 555Responsible AAggressive AllocationYes2742
Liontrust Sust Fut Mgd 3 555Aggressive AllocationYes2705
Robeco Sust Global Stars Eqs Fd555Global Equity Large CapYes2643
Brown Advisory US Sust Gr 555US Equity Large Cap GrowthYes2597
BNY Mellon Mlt-Asst Balanced 555Aggressive AllocationNo2355
GuardCap Global Equity 555Global Equity Large CapNo2254
BNY Mellon Mlt-Asst Growth 555Aggressive AllocationNo1969
Janus Henderson Global Sust Eq 555Global Equity Large CapYes1771
Schroder ISF Glbl Engy Tnstn 555Energy Sector EquityYes1564
Schroder ISF Hong Kong Eq 555Greater China EquityNo1561
JPM Pacific Equity 555Asia EquityNo1517
Legg Mason CB US Eq Sust Ldrs 555Responsible AUS Equity Large Cap BlendYes1312
Morgan Stanley UK Global Brands 555Global Equity Large CapNo1161
Schroder ISF EM Dbt Abs Rt 555Emerging Markets Fixed IncomeNo991
BlackRock Continental Euro 555Europe Equity Large CapNo968
BA Beutel Goodman US 555US Equity Large Cap ValueNo894
Thesis Juniper 555Aggressive Allocation770