Good Money Week: Renewables popular as responsible flows increase

interactive investor shares ethical long list and Hargreaves Lansdown sees flows into responsible funds increase 17%

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ESG Clarity

This Good Money Week, investment platforms have shared the ethical and responsible funds most popular with their customers.

Renewable energy funds and investment trusts accounted for seven of interactive investor’s top 10 bestselling ethical funds and trusts, while flows into responsible funds on Hargreaves Lansdown’s platform are up 17% to far this year compared with the same period last year.

Topping interactive investor’s long list of more than 140 ESG funds, investment trusts and ETFs this year is investment trust Greencoat UK Wind, followed by Gore Street Energy and The Renewables Infrastructure Group.

Myron Jobson, personal finance campaigner at interactive investor, said: “Funds focused on the ‘E’ for environmental in ESG continues to dominate the list of platform bestsellers. Interestingly, budding interest in these portfolios could be down to the level of income on offer.

A recent interactive investor poll of 1,617 people found the UN’s Intergovernmental Panel on Climate Change report had caused just under two fifths (39%) of respondents to say they were more likely to invest in ‘green’ investments as a result of report’s key findings.

Most bought ethical funds/investment trusts on interactive investor ethical long list this year (to 27 September 2021).

PositionInvestmentFund/Investment trust
1GREENCOAT UK WINDInvestment trust
2GORE STREET ENERGYInvestment trust
3THE RENEWABLES INFRASTRUCTURE GROUPInvestment trust
4NEXTENERGY SOLAR FUNDInvestment trust
5FORESIGHT SOLAR FUNDInvestment trust
6LIONTRUST SUSTAINABLE FUTURE GLOBAL GROWTHFund
7CIVITAS SOCIAL HOUSINGInvestment trust
8JLEN ENVIRONMENTALInvestment trust
9STEWART INVESTORS ASIA PACIFIC LEADERS SUSTAINABILITY FUNDFund
10BLUEFIELD SOLAR INCOMEInvestment trust
Source: interactive investor

Meanwhile, flows into responsible funds at Hargreaves Lansdown have hit another record high this year, up 17% from last year, with active ESG funds accounting for 73% of that.

“2020 was a record-breaking year for flows into sustainable, ethical, ESG and impact funds,” said Emma Wall, head of investment analysis at Hargreaves Lansdown.

“Expectations for 2021 flows were therefore muted after such a strong preceding year, but once again HL clients have put their money where their morals are and in-flows to responsible investment funds have hit yet another record high.”

She added: “The past 18 months has accelerated certain social and economic movements, but the new norm of e-commerce, low-carbon, flexi-working, re-use and repair households are here to stay – as is investors holding businesses accountable for their actions and impact.”

Most popular ESG funds on the HL Platform 2021 (by total net flow, alphabetical order)

Top ESG funds 2021 to date (alphabetical)
Aegon Ethical Equity Fund
BNY Mellon Sustainable Real Return
Fundsmith Sustainable Equity
Guinness Sustainable Energy
Legal & General Future World ESG Developed Index
Liontrust SF Global Growth
Ninety One Global Environment
Royal London Sustainable World
Stewart Inv Indian Subcontinent Sustainability
Vanguard ESG Developed World All Cap Equity
HL data provided correct as of 21/09/2021.

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