Investors are pouring money into ESG strategies, pushing some ETFs past the $1 billion mark

Here’s some data for thought: In the first half of 2019, funds focused on environmental, social and governance (ESG) factors hoovered up $8.4 billion in inflows, according to data from Morningstar.

Note that in the whole of 2018, ESG inflows were $5.4 billion, itself a record.

The gush of incoming funds has boosted assets with ETFs such as the iShares ESG MSCI USA Leaders ETF (SUSL) and the Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) beyond the $1 billion mark.

Investors disillusioned with returns from traditional assets

Expensive, traditional asset-based managers have been unable to outperform the broad market, and disappointed investors are channelling funds instead into alternative strategies such as ESG.

ESG ETFs typically avoid investing in companies that are low on the ESG scorecard.

Since 2013, ESG funds have garnered investments worth $35 billion.