Gender equality attracting investors

Despite a poor performance, the Sustainable Development Goal (SDG) number 5 ranked as the most attractive goal last week netting USD$690 million in inflows. SDG 9 followed with USD$73.7 million of new assets globally. Only two out of the four ESG investing strategies, ‘ESG Thematic’ and ‘General Integration’, managed to attract new money while ‘Best-In-Class’ and ‘Exclusion Screening’ strategies recorded net outflows.

Gender Equality was the dominant goal

The 5th sustainable development goal, also known as gender equality, lead the way in terms of global flows last week. Despite an average return of –12.75%, the15 ETFs tracking the gender equality goal attracted USD$690 million in new assets globally. US-domiciled ETFs dominated, comprising 99.70% (USD$687.4 million) of the net inflows, while ETFs domiciled in Europe failed to experience noticeable flow action.

ETFs investing in industry, innovation, and infrastructure, commonly known as the 9th sustainable development goal, were the worst-performing ESG ETFs since the beginning of the year. They traded in the red for the most part last week bringing their year-to-date return to -25.17%. Surprisingly, investors kept pouring capital into these ETFs. Despite their poor performance, they managed to attract USD$73.7 million in net inflows across 37 ETFs.

In contrast, Climate Action ETFs stood at the other end of the spectrum. These 304 ETFs tracking SDG 9 lost the most assets netting USD$709 million in outflows last week.

Interestingly, the Asia Pacific (APAC) region has witnessed the most fund action; meanwhile, Europe has maintained its leadership in SDG ETFs so far. APAC captured a big chunk of the capitals’ flows garnering USD$62.6 million in net inflows. Furthermore, America was riding a sell-off wave at the same time last week.   

ETFs in play:

• Gender Equality ETFs
• Industry, Innovation, and Infrastructure ETFs
• Climate Action ETFs

ESG Thematic Strategy Attracted the Most

‘ESG Thematic’ and ‘General Integration’ were equally attractive to ESG investors, respectively attracting USD$678 million and USD$651 million last week. On the flip side, ‘Best-In-Class’ and ‘Exclusion Screening’ were hit by a wave of selling. ‘Exclusion Screening’ netted USD$40 million in outflows only to be dwarfed by capital going out of ‘Best-In-Class’. This ESG strategy lost the most assets in the region of USD$1.19 billion.

ETFs in play:

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

Data for this article is as of May 06th, 2022