Capital Flowing in ESG ETFs Despite Poor Performance

Despite its poor performance, the sustainable development goal (SDG) #16 was the most attractive bucket last week with capital net inflows of USD$66.2 million. SDG 13 followed suit and came in second with USD$50.3 million of new assets globally. Three out of four ESG investing strategies, ‘ESG Thematic’, ‘Exclusion Screening’, and ‘General Integration’ managed to attract new money while the ‘Best-In-Class’ strategy recorded net outflows.

SDG 16 Dominated Flows Globally

Peace, justice, and strong institutions, also known as SDG #16, took the lead last week in terms of global flows. This SDG managed to attract USD$66.2 million in new assets spread across 18 ETFs globally despite their poor performance since the beginning of the year (-7.33% on average). America took the lion’s share with 76% (USD$50.3 million) of the net inflows. Meanwhile, ETFs tracking SDG 16 in Europe accounted for 24% of total net inflows (USD$15.9 million).

Climate Action ETFs were still trading in the red bringing their year-to-date performance to -11.36%. Despite their lackluster performance, they managed to attract over USD$50.3 million in net inflows across 304 ETFs.

Interestingly, although Europe has maintained its leadership in SDG ETFs so far, America was riding the wave of subscriptions last week. The region alone registered a whopping USD$146.9 million in net inflows captured by 52 funds. Conversely, ETFs invested in SDG 13 incurred USD$96.6 million in capital outflows in Europe.   

ETFs in play:

• Peace, justice, and strong institutions ETFs
• Climate Action ETFs

ESG Thematic Strategy Attracted the Most

Among the four ESG strategies, ‘Best-In-Class’ was the only one hit by a wave of selling, with outflows totalling USD$158.3 million. Conversely, the ‘ESG Thematic’ strategy was the most attractive adding USD$194.2 million of new assets globally. ‘General Integration’ and ‘Exclusion Screening’ placed second and third with USD$179.5 million and USD$3 million of inflows respectively.

ETFs in play:

• Best-In-Class ETFs
• ESG Thematic ETFs
• Exclusion Screening ETFs
• General Integration ETFs

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