Flow action: Capital into SDG 5 and out of SDG 9

The Sustainable Development Goal (SDG) number 13 jumped from being the least to most attractive in a matter of a week. Last week, it ranked as the most attractive goal, netting USD$35.56 million in inflows. SDG 5 followed with USD$4.6 million of new assets globally. Only the ‘General Integration’ investing strategy attracted new money while ‘Best-In-Class,’ ‘Exclusion Screening,’ and ‘ESG Thematic’ strategies recorded net outflows.

Climate action on the rebound

Even though the 313 ETFs tracking Climate Action averaged -17.45% year-to-date, Climate Action rebounded to lead the flow receivers last week. The 13th sustainable development goal registered USD$35.56 million in net inflows compared to USD$709 million in net outflows in the prior week. It was primarily European investors flocking to Climate Action ETFs, with ETFs domiciled in the region attracting USD$197 million over the last week. In contrast, their American counterparts exited investments in Climate Actions, with US-domiciled ETFs recording USD$161 million in outflows. 

ETFs investing in the 5th sustainable development goal were last week’s top receivers. They maintained their attractiveness, though to a much lesser extent. Gender Equality ETFs enticed second most inflows, registering a USD$4.6 million inflow of investors’ money. 

Affordable and Clean Energy ETFs lost the most assets on the other end of the spectrum. They recorded USD$210 million in outflows driven by an exodus in the American market, where ETFs shed USD$214 million of assets compared to an inflow of around USD$5 million in Europe. 

Europe, the ESG global leader in terms of assets under management, lived up to expectations and attracted most flows; meanwhile, America was still similarly riding a wave of selloffs to the prior week. Europe domiciled ETFs managed to attract USD$356 million; ETFs domiciled in America netted USD$328 million in outflows; and ETFs in the APAC garnered USD$10 million in net inflows.   

ETFs in play:

• Gender Equality ETFs
• Climate Action ETFs

General integration was the most attractive strategy

Over the last week, the ‘General Integration’ ESG strategy lured investors into pouring USD$467 million into 464 ETFs. On the contrary, ‘Exclusion Screening,’ ‘Best-In-Class,’ and ‘ESG Thematic’ were hit by a wave of selling where they lost USD$72.91 million, USD$120 million, and USD$236 of assets, respectively, over the last week. 

ETFs in play:

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

Data for this article is as of May 13th, 2022.

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