ESG Research Update

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ESG Research

Sustainable open-ended funds doing very well in Q2 2020

The most recent Global Sustainable Fund Flows report by Morningstar looked at almost 3,500 sustainable open-ended funds and exchange-traded funds (ETFs) globally for Q2 2020 noted that sustainable funds did much better after the March market sell-offs.

Australasian sustainable fund assets increased significantly in the second quarter, up 18 per cent at the close of the first quarter from $14.9 billion to $17.7 billion. The end of June saw one of the highest-ever levels, beaten only by December 2019 levels.

Key findings include:

  • The research found 108 Australasian sustainable fund strategies, up from 86 at the close of Q1 2020

  • The top 15 funds account for 60 per cent of all sustainable fund assets

  • Australian Ethical and Vanguard account for 41 per cent of all Australasian sustainable fund assets on the database

  • In Q2 20202, only one sustainable fund was launched (Fidelity Sustainable Water and Waste)

  • There are a growing number of funds that consider ESG factors in asset selection

  • Sustainable fund inflows were up 72 per cent globally in Q2 2020 to $99.8 billion

  • European sustainable funds had the most inflows in Q2 2020, with 86 per cent of total inflows

  • US sustainable funds saw 14.6 per cent of total inflows

  • Asian and Japanese sustainable funds reported outflows of US$920 million

  • Assets in sustainable funds hit a record high of $1.49 trillion at the end of June, up 23 per cent from the previous quarter

  • Funds released 125 new offerings

  • Fund managers are looking more towards repurposing and rebranding conventional products into sustainable funds (40 in Europe and three in the US)