ESG ETFs top flow receivers and losers switch positions

ETFs aligned to the Sustainable Development Goal (SDG) number 13  topped the flow receivers’ list last week with USD$245.47 million. Products aligned to SDG 16 followed with USD$199.06 million of new assets globally. Meanwhile, all four ESG investing strategies, ‘Best-In-Class,’ ‘ESG Thematic,’ ‘Exclusion Screening,’ and ‘General Integration,’ also attracted new investor money.

Prior week’s flow receivers switch spots with flow losers

Investors steered their capital into Climate Action, the Sustainable Development Goal 13, in anticipation of the World’s Environment Day. ETFs aligned to SDG 13 led the flow receivers last week, registering USD$245.47 million in net inflows reversing the previous week’s USD$26.02 million net outflows. The trend appears to have been driven primarily by European investors, with ETFs domiciled in the region attracting USD$254.31 million of net inflows over the last week while U.S.  domiciled ETFs shed USD$8.8 million. 

ETFs investing in securities aligned to the 16th SDG came in second last week regarding the most inflows, having overturned previous flow losses. Peace, Justice, and Strong Institutions ETFs rebounded from dropping USD$12.01 million of assets in the prior week to attracting the second-highest volume of inflows last week, pulling in USD$199.06 million of investor capital. 

Similarly, ETFs adopting the Industry, Innovation, and Infrastructure theme – the Sustainable Development Goal 9 – made a comeback after having suffered record losses in the prior week. The 40 ETFs aligned to SDG 9 bounced back with USD$31.55 million of net inflows last week, recovering almost all the previous week’s losses (USD$32.74 million as of May 27th). 

At the other end of the spectrum, the top 2 sought-after sustainable development goals for the week ending May 27th became the least favored among global investors last week. ETFs aligned with No Poverty (SDG 1), and Affordable and Clean Energy (SDG 7) shed the most assets. The former recorded USD$16.47 million in outflows compared to a net inflow of USD$87.93 the week before. Meanwhile, the latter registered USD$114.48 million in net outflows versus USD$65.93 of net inflows the prior week.

Europe, managing most ESG assets, remained the most appealing to investors. In contrast, America was still riding a wave of sell-offs for the fourth consecutive week. ETFs domiciled in America recorded USD$43.57 million, while ETFs in the APAC region netted USD$1.33 million in net inflows, only to be dwarfed by ETFs domiciled in Europe, having added USD$667.35 million of assets.   

ETFs in play:

• Affordable and Clean Energy ETFs
• Climate Action ETFs
• Industry, Innovation and Infrastructure ETFs
• No Poverty ETFs
• Peace, Justice and Strong Institutions ETFs 

Exclusion screening succeeded at attracting investors

All four ESG investing strategies witnessed a cash influx over the past week. Most notably, ‘ESG Thematic’ was the most appealing to investors. The strategy attracted USD$284.56 million of investor capital, followed by ‘Best-In-Class’ and ‘General Integration.’ The two strategies pulled in USD$237.34 million and USD$95.67 million of cash influx, respectively. ‘Exclusion Screening’ attracted the least, netting USD$7.52 million in inflows. 

ETFs in play:

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

Data for this article is as of June 2nd, 2022.