Surge in affordable and clean energy investments 

ETFs aligned to the Sustainable Development Goal (SDG) number 7 – Affordable and Clean Energy – led the flow receivers last week, having pulled in USD$154 million of investor money. Meanwhile, products aligned to SDG 1 – No Poverty – came in second with USD$38 million of new assets globally. Only two of the four ESG investing strategies, ‘General Integration,’ and ‘Exclusion Screening,’ managed to attract new investments.

Affordable and clean energy reverse course 

Investors steered their capital into Affordable and Clean Energy, the 7th Sustainable Development Goal (SDG), pushing it to become the flow leader among the 17 SDGs. ETFs aligned to this goal registered USD$154 million in net inflows reversing the previous week’s USD$59 million net outflows. The trend appears to have been driven mainly by the significant cash influx experienced by the Invesco WilderHill Clean Energy ETF (PBW) having brought in USD$125 million of inflows over the week, equivalent to 82% of total flows into ETFs adopting the SDG 7. 

ETFs investing in securities aligned to the 1st SDG, No Poverty, were the second most appealing to global investors last week. They attracted a total of USD$38 million of investor capital,slightly decreasinge from the previous week’s USD$41 million net inflows. 

Similarly, ETFs adopting the Responsible Consumption and Production theme – the 12th Sustainable Development Goal – reversed the previous week’s outflows. The 4 ETFs aligned to SDG 12 brought in USD$4 million of net inflows, compared to the last week’s cash outflows of USD$4 million. 

ETFs in play:

• Affordable and Clean Energy ETFs
• No Poverty ETFs
• Responsible Consumption and Production ETFs

General integration and exclusion screening netted cash inflows

Only two of the four ESG investing strategies witnessed an influx of cash over the past week. Most notably, ‘General Integration’ was the most appealing to investors. The strategy attracted USD$190 million of investor capital, followed by ‘Exclusion Screening’ with USD$141 million. On the other hand, ETFs adopting the ‘Best-In-Class’ and ‘ESG Thematic’ ESG investment strategies shed USD$144 million and USD$159 million of assets, respectively.

Like the previous week, Europe, which manages most of ESG assets, and the APAC region were riding a wave of sell-offs;  ETFs domiciled in Europe recorded USD$122 million in net outflows while ETFs in the APAC region shed USD$50 million of assets. ETFs domiciled in America, however, managed to attract USD$199 million of investments 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 June 24th, 2022.