UK responsible investment funds under management (AUM) stood at £57bn at the end of January, the Investment Association (IA) has found, but their overall share of industry funds under management remains low at 4%.
More encouragingly, however, that £57bn in AUM marks a 66% growth over the past 12 months, in comparison to 7% rise across funds overall.
Almost 60% of the £57bn is invested in equity funds, with 20% in bond funds and 20% in mixed asset funds.
“This growth is indicative of how important investing with ESG considerations in mind has become,” said Chris Cummings, CEO of the IA.
These findings come as the IA publishes more detailed responsible investment fund data in line with its 2019 Responsible Investment Framework. The IA said it will be publishing this new data quarterly in order to help investors compare funds.
In this first set of findings, the IA also said net retails sales into responsible investment funds reached £1.2bn in January 2021. January’s total inflows into retail sales was £3.2bn, making responsible investment funds account for 37% of that total.
Last year, the monthly average for flows into responsible funds was nearly £1bn per month, with sales accounting for 43% of all fund sales last year, reaching £12.4bn for the 12-month period.
Of January’s £1.2bn in inflows, the IA said £704m was invested in equity funds, £180m was directed to bond funds and £241m was allocated to mixed-asset funds.
Responsible investment funds net retail sales by asset class
|January 2021||December 2020||November 2020|
|Other (incl. Property)||£32m||£64m||£40m|
Kate Marshall, acting head of investment analysis at Hargreaves Lansdown, said of the IA’s findings: “Responsible investment funds were the shining light of 2020. Against the backdrop of a global pandemic and uncertainty about our futures, investors honed in on their moral values and ethical credentials.”