Global investors dropped ESG ETFs 

ETFs aligned to the Sustainable Development Goal (SDG) number 2 were among the few to maintain their inflow momentum, topping the flow receivers’ list last week with USD$1.77 million. Products aligned to SDG 6 followed with USD$1.63 million of new assets globally. And while the ‘Exclusion Screening’ investing strategy also attracted new money, ‘Best-In-Class,’ ‘General Integration,’ and ‘ESG Thematic’ strategies recorded net outflows.

Zero Hunger (SDG 2) pulled in cash from European Investors

The Sustainable Development Goal, Zero Hunger, led the flow receivers last week despite the negative performance of the 2 ETFs aligned to it, registering USD$1.77 million in net inflows (although down from the previous week’s net inflows of USD$3.09 million). This trend appeared to be driven primarily by European investors, with ETFs domiciled in the region attracting inflows over the last week. In contrast, their American counterparts did not see any cash in or out. 

ETFs investing in securities aligned to the 6th sustainable development goal were also among last week’s top receivers. They maintained their attractiveness, though to a much lesser extent. Clean Water and Sanitation ETFs rebounded from dropping USD$291 million of assets in the prior week to attracting the second-highest volume of inflows last week, pulling in USD$1.63 million of investors' capital. 

Climate Action ETFs and Affordable and Clean Energy ETFs lost the most assets at the other end of the spectrum. The former recorded USD$205 million in outflows driven by an exodus in the European market, where ETFs shed USD$247 million of assets compared to an inflow of around USD$45 million in America. Meanwhile, the latter registered USD$96 million in net outflows across all regions.

Europe, which holds most ESG assets under management, shed fewer assets than America, which was still riding a wave of sell-offs for two consecutive weeks. ETFs domiciled in Europe managed only to lose USD$46 million. At the same time, ETFs in the APAC netted USD$8 million in net outflows, only to be dwarfed by ETFs domiciled in America, having shed USD$1.13 billion in outflows.   

ETFs in play:

• Zero Hunger ETFs
• Climate Action ETFs
• Affordable and Clean Energy ETFs

Exclusion screening succeeded in attracting investors

‘Exclusion Screening’ was the only ESG strategy to witness a cash influx last week, attracting USD$95 million of investor capital spread over 170 ETFs. Alternatively, ‘General Integration,’ ‘Best-In-Class,’ and ‘ESG Thematic’ were hit by a wave of selling. They lost USD$561 million, USD$390 million, and USD$334 million in 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 20th, 2022.