We’re pleased with the performance to date, and it’s fantastic to see so many clients embrace MyFolio Enhanced ESG Index. Assets under management recently surpassed £215 million (1).

As we celebrate three years of this innovative suite, it feels like a good moment to reflect on progress since launch, and find out why the range has proved to be so popular.

The MyFolio Enhanced ESG Index story

Back in the early 2020s, it was clear to us from conversations with our clients and from regulatory changes in the UK and Europe, that there was increasing demand for a simple low- cost investment solution that made a conscious effort to do less harm and more good.

A range of portfolios combining the tried and tested MyFolio investment process with a focus on ESG (environmental, social and governance) outcomes for investors.

When we were designing the MyFolio Enhanced ESG Index range, we were keen to make sure advisers who were already familiar with MyFolio would recognise all the features they value in any MyFolio fund.

We knew advisers would expect to see a broad range of asset classes in the solution, as well as the carefully defined risk outcomes we’ve used for over a decade. We also wanted to make sure they would recognise the Managed & Model Solutions Team behind MyFolio.

Spot the difference

We use the MyFolio Index range as the foundation for MyFolio Enhanced ESG Index and manage the range using the same long-term strategic asset allocation (SAA).

The key difference is that for MyFolio Enhanced ESG Index, we populate the 5 risk levels with a deliberate tilt towards positive ESG factors and away from some areas to which investors might like less exposure - such as high carbon production or tobacco.

SDR and its application to the range

Besides MyFolio Enhanced ESG Index, we also offer the MyFolio Enhanced ESG range, which invests in active and passive. We’re incredibly proud of the strides we've made over the past year in shaping and structuring both of our Enhanced ESG ranges.

Throughout 2024, we dedicated significant time and effort in conjunction with our Product and ESG teams to enhancing and adapting our approach in anticipation of the SDR (Sustainability Disclosure Requirements) rules that came into effect in December. The FCA's recognition of both our ranges as having 'material sustainable characteristics' was a welcome outcome.

Activity

The ESG investing landscape in the UK continues to broaden out with multiple new entrants appearing on our screens.

We’ve been active within MyFolio Enhanced ESG Index over the past year with the addition of two new Aberdeen Evolve strategies within the equity allocations covering European and Asian markets.

Making the most of Aberdeen’s quantitative capabilities

Our Evolve range fits neatly within our process as the portfolios are built with the help of our Quantitative Investment Solutions team.

The ESG factors being targeted and exclusionary policy of these products therefore aligns perfectly with the rules and guidelines we work to.

Sustainable infrastructure

We’ve also worked closely with one of our key passive partners, helping design and seed an innovative sustainable infrastructure strategy which we added to the ESG ranges as part of the last SAA optimisation in the fourth quarter of 2024.

Final thoughts…

We’re happy with our progress to date in terms of MyFolio Enhanced ESG Index. Looking back on the range’s first three years, we’re delivering on our stated ESG objectives. What’s more, we observe that the performance trajectory and alignment to the sister MyFolio Index range continues to be high, as you can see in the chart below.

Past performance is not a guide to future returns and future returns are not guaranteed.

MyFolio Enhanced ESG Index II Strategy 

Discrete annual returns net % - year to 31/5 

*Partial year - strategy launched 30 June 2022

MyFolio Index II Strategy

Discrete annual returns net % - year to 31/5 

Sources: Aberdeen. Basis: Total Return, NAV to NAV, UK Net/Gross Income Reinvested

Past performance is not a guide to future returns and future returns are not guaranteed.

It’s also pleasing to see the uptick in client interest and engagement around both our Enhanced ESG ranges, as advisers seek to embed ESG options within their CIPs (Centralised Investment Propositions).

Further information

If you’d like to hear more about MyFolio Enhanced ESG Index, or about any of the MyFolio family of risk-rated solutions, please contact one of our business development directors, or visit our dedicated MyFolio webpages.