Ethical pressures boost ESG funds

27일 전
in esg

Ethical pressures boost ESG funds (FT)

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  • While the total of assets under management (AUM) in ESG funds is still small, ESG has become an increasingly popular smart beta strategy, with AUM growing the fastest among smart beta ESG strategies (5 year CAGR of 70%).

  • Smart beta appears to be driving the growth in ESG investments in recent months, with the iShares ESG MSCI USA ETF drawing in about US$900m in September, increasing the fund’s total assets from US$296m to US$1.2bn in one month, according to Bloomberg data.

  • Negative screens are still the largest category within smart beta ESG strategies (about two thirds) and issues around data availability and quality remain a major impediment to the growth of smart beta ESG.

###Analysis and Comments

  • According to Morningstar, the volume of assets in factor funds rose from US$565bn to US$1.2tn in five years, with a lot of the demand for smart beta (ESG) products coming from pension funds.

  • The article once again highlights the main issue ESG investment strategies – and ESG-themed smart beta funds in particular – are faced with; the limitations of the underlying data, especially due to a general lack of historic data, but also limited and/or inconsistent disclosure by companies.

  • The full report from Sustainalytics, Oxford university, and Aberdeen Standard Investments outlining the development of ESG in smart beta strategies can be accessed [here](Ethical pressures boost ESG funds (FT)

�. While the total of assets under management (AUM) in ESG funds is still small, ESG has become an increasingly popular smart beta strategy, with AUM growing the fastest among smart beta ESG strategies (5 year CAGR of 70%).

�. Smart beta appears to be driving the growth in ESG investments in recent months, with the iShares ESG MSCI USA ETF drawing in about US$900m in September, increasing the fund’s total assets from US$296m to US$1.2bn in one month, according to Bloomberg data.

�. Negative screens are still the largest category within smart beta ESG strategies (about two thirds) and issues around data availability and quality remain a major impediment to the growth of smart beta ESG.

Berenberg view

�. According to Morningstar, the volume of assets in factor funds rose from US$565bn to US$1.2tn in five years, with a lot of the demand for smart beta (ESG) products coming from pension funds.

�. The article once again highlights the main issue ESG investment strategies – and ESG-themed smart beta funds in particular – are faced with; the limitations of the underlying data, especially due to a general lack of historic data, but also limited and/or inconsistent disclosure by companies.

�. The full report from Sustainalytics, Oxford university, and Aberdeen Standard Investments outlining the development of ESG in smart beta strategies can be accessed here. ).

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