Connect with us

Featured

ESG Fund Inflows Doubled Last Year and Could Accelerate

Bank of America’s (BofA) recent report shows that 66% of the global ESG indexes they track have outperformed their regional (non-ESG) benchmark so far this year (through August 31), thus beating the one-year hit rate of 60%, but below the three-year hit rate of 71%. Although the pace of monthly inflows has slowed in recent months, 2021 remains on track to be a record year for ESG asset gathering.

Published

on

Sustainable investing has already established itself as a trend, as the numbers speak for themselves. According to a report by Bank of America (BofA), inflows into ESG funds are double last year’s and could accelerate.

Thus, assets under management in more than 2,300 ESG funds worldwide reached a record $1.65 trillion in August, according to EPFR data, twice as much as a year ago and three times the growth of non-ESG funds.

“Year-to-date, $3 out of every $10 invested in equities is going into ESG funds. Although the pace of monthly inflows has slowed in recent months, 2021 remains on track to be a record year for ESG asset gathering, with flows in August and year-to-date more than double those of the previous year. And flows could accelerate by the end of the year if the seasonality trends of the past two years continue,” they note in the report.

Find more details about the increase in ESG funds inflows and read the most important business headlines with the Born2Invest mobile app.

ESG funds, towards the energy sector and less towards the technology sector?

The bank also noted that ESG funds around the world are more underweight in energy than in any other sector relative to the benchmark index. “However, as we discussed in our recent launch of the ESGMeter for the Energy sector, the sector may not be as “brown” as it seems,” they explain and reference that some ESG funds may be recognizing this as well: U.S. ESG funds increased their exposure to Energy more than any other sector in the last month.

SEE ALSO  3 fundamentals every entrepreneur should know

In addition, it is worth noting that U.S. and European ESG funds have reduced their exposure to the technology sector, which has long been a favorite of ESG funds because of its “green” reputation, but perhaps not always justified.

From BofA they also emphasize that 66% of the global ESG indexes they track have outperformed their regional (non-ESG) benchmark so far this year (through August 31), thus beating the one-year hit rate of 60%, but below the three-year hit rate of 71%.

“So far this year, ESG index performance has been most pronounced in emerging markets and North America, while the hit rate in other developed markets has been mixed,” they note.

__

(Featured image by Skitterphoto via Pixabay)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in Funds&MARKETS, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Daphne Freeman has worked in the crowdfunding and impact investing industry for the past few years, gaining experience in marketing, and connecting businesses and entrepreneurs in need with the right investors. As a seasoned grant writer as well as financial market journalist, she is passionate about making a social impact in the world. A free spirit, Daphne also enjoys writing and exploring topics of interest, currently CBD, health and beauty, and social media influencers.