ETFs see popularity for sustainable products
Two sustainable exchange traded funds (ETFs) were among the most popular products during July, highlighting investors’ increased interest in ethical and sustainable vehicles.
According to a monthly review by BetaShares, the Global Sustainability Leaders ETF saw inflows of $96.2 million while the Australian Sustainability Leaders ETF saw inflows of $41.8 million. A currency hedged version of the Global Sustainability Leaders fund was also launched during the month.
“In recent times, climate and decarbonisation have been the key themes for sustainable-minded investors, but we believe that the pandemic has also brought social and governance strongly into focus,” the firm said.
“We think there is, and will continue to be, an increased focus on social responsibility, and that investors will favour companies that demonstrate an appropriate weighting to social and governance considerations, rather than a ‘profit above all else’ attitude.”
According to data from FE Analytics, within the Australian Core Strategies universe, the Global Sustainability Leaders fund returned 11.7% since the start of 2020 to 31 July while the Australian Sustainability Leaders fund lost 5.2%
This compared to losses of 3.6% by the global sector and 9% by the Australian equity sector.
Other sustainable and responsible ETFs available included VanEck Vectors MSCI Australian Sustainable Equity, VanEck Vectors MSCI International Sustainable Equity, Russell Australian Responsible Investment ETF, UBS IQ MSCI Australia Ethical ETF, UBS IQ MSCI World ex Australia Ethical ETF.
The top inflows were seen in the BetaShares Australian High Interest Cash ETF which saw inflows of $166.3 million.
The largest outflows were seen in Australian and US equities as well as cash products with the biggest outflows coming from iShares Core S&P ASX 200 ETF and SPDR S&P ASX 200 ETF which lost $159 million and $131 million during the month.
Total market cap was $67.2 billion, an increase of $1.3 billion over the month.
AUTHOR
Laura Dew
Recommended for you
Outflows from an Australian private markets fund manager have caused FUM at Pacific Current to decline by $1 billion in the last quarter.
Former RIAA chief executive Simon O’Connor has joined the ethical advisory panel at U Ethical Investors.
Financial services leaders are “all cashed up with nowhere to grow” when it comes to M&A activity, according to Deloitte, with 90 per cent saying they have strong balance sheets ready for an acquisition.
As fund managers are urged to diversify their product ranges, they are finding a faster way to do this is via an acquisition of existing firms but experts say it is not without potential culture clashes.
