ESG Funds More Than Triple in Latest Year

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Data from ETFGI confirms rising global interest in ESG investing.

ETFGI, the consulting and analytics firm that provides services around global exchange-traded products, released data on global trends for ESG in ETFs/ETPs during the first half of 2020. Inflows into these funds were US$3.49 billion during June 2020, bringing year-to-date net inflows to US$32.02 billion. These were more than three times the inflow of US$9.86 billion into ESG ETFs/ETPs seen in 2019. (Mondo Visione)

AUM of ESG ETFs at an all-time high

ETFGI also reported that assets invested in ESG ETFs and ETPs increased by 7.3% from US$82 billion at the end of May to a new record of US$88 billion in June.

Globally, 21 new ESG ETFs/ETPs were launched in June 2020.

ETFGI said 89 providers on 31 exchanges in 25 countries had 369 ETFs/ETPs, with 1,019 listings. This showed the massive growth in the global ESG ETF/ETP industry since 2002 when the first ESG/ETP was launched.

European investors appear to be more environmentally conscious than the rest of the world. The ETFGI report said European products accounted for 50.9% of overall ESG assets followed by those in the US with 40.5% and then Asia Pacific ex-Japan with 5.8%.

Equities provided a solid tailwind

Deborah Fuhr, managing partner, founder, and owner of ETFGI commented that US equities staged a recovery in the second quarter from the previous quarter’s decline, with the S&P 500 gaining 1.99% in June. “Although COVID cases in the US are still increasing, the stimulus from the Fed and Congress aided the market rebound,” she observed.

Developed markets outside the US rose 3.44% in June and were up 16.8% in the second quarter. The top gainers were Hong Kong, up 11.35%,  New Zealand up 10.09%, the Netherlands up 8%, and Germany (up 6.08%).  Emerging markets gained 7.6% in June and rose 19.3% in the second quarter, noted ETFGI’s Fuhr.

2020, an inflection point for ESG?

Earlier this month, ETF industry veteran Dave Nadig, who now serves as ETF Flows’ chief investment officer and director of research, said to MarketWatch on ESG: “The dam has broken. This is the year it came out of the backroom and became a reality.”

Armando Senra, head of iShares Americas, commented in a MarketWatch interview that 2019 was an inflection point for ESG. It was the year when investors actually walked their ESG talk, he added.

Related Story:    How the Pandemic Could Affect ESG Investing (and ETFs)

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