ESG exchange traded fund assets climb 33% in a year

An analysis by research group ETFGI found $873m invested in the top 20 ESG exchange traded funds

Assets invested in dedicated environmental, social and governance exchange traded products increased by more than a third in the year to the end of November.

Research conducted by exchange traded fund research consultancy ETFGI for its Industry Landscape Insights report found that assets in ESG ETPs increased by 33.8% in the 12 months to November 2018, taking the total amount invested to $23.2bn.

In a press summary, released on 27 December, ETFGI identified 205 dedicated ESG exchange traded products at the end of November, with 66 such products being launched in 2018 and four in November 2018.

The analysis found that there were “substantial” inflows into ESG exchange traded products in November, with the top 20 most popular ESG funds gathering $873m in assets during the month.

The UBS ETF MSCI World Socially Responsible fund was the largest benefactor, witnessing net inflows of some $140m, according to the analysis.

In a commentary accompanying the figures, the consultancy group noted that “confusion persists” as to what qualifies as a dedicated environmental, social and governance-focussed product.

“According to PRI, a UN-supported initiative which seeks to understand the investment implications of ESG issues, 56% of adopters believe there is a lack of clarity in ESG definitions,” the ETFGI report said.

“ETFGI’s classification system attempts to provide greater precision, with ETFs/ETPs listed globally organised into categories, including core ESG products and theme-based groups, such as Clean/Alternative Energies and Gender Diversity.”

The first dedicated ESG exchange traded fund – the iShares MSCI USA ESG Select ETF – was launched in 2002.