Australian ETP market driven by sustainability products

morningstar/ETPs/sustainability/

11 May 2018
| By Oksana Patron |
image
image
expand image

Australia’s exchange-traded product (ETP) market has seen growth in size and complexity, with A$36.3 billion under management at the end of March, thanks to growth in sustainability-focused listed products, according to Morningstar’s ETFInvestor newsletter.

The sustainability-focused products in Australia almost doubled in assets to March 2018 and accounted for A$575.8 million in funds under management (FUM).

According to Morningstar, there were ten sustainability-focused ETPs in Australia, from BetaShares, Russell Investments, UBS, and VanVeck Vectors, which were all equity products that invested in Australia and offshore.

Also, all products applied positive and/or negative screens to identify stocks, with negative screens including a downweight or exclusion of certain sectors such as tobacco or petroleum and the avoidance of stocks that ranked poorly on an environmental, social and governance (ESG) basis within their sector.

At the same time, positive screens favoured companies that fared well on an ESG basis.

Morningstar said that products earned different sustainability ratings as they used different screens.

Morningstar manager research analyst, Anshula Venkataraman, said: “In 2016, Morningstar launched the Morningstar Sustainability Rating to help investors assess strategies through an environmental, social, and governance lens.”

“In this edition of ETFInvestor, Morningstar provides an overview of what is available for investors seeking out listed ESG or ethical products and how investors can use the sustainability rating to inform their decisions.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 3 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 1 day ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 6 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND