Sustainable funds see record inflows in July
Recent data from fund network, Calastone showed UK-based funds focusing on environmental, social and governance issues saw record inflows of 362 million pounds ($472.70 million) in July as investors seek growth rather than value stocks. ...
According to Calastone, ESG equity funds have posted record inflows in each of the previous four months.
ESG and other global growth-focused funds have benefited from cheap borrowing rates, boosting expectations of companies’ future profits, said Edward Glyn, head of global markets at Calastone, adding there was “very strong investor demand” for ESG funds.
Barry O’Dwyer, chief executive of Royal London, said separately on Monday that purchases of ESG funds had contributed to 1 billion pounds in net inflows for the UK insurer and asset manager in the first six months of 2020.
“That’s been a major winner in the first half, in particular amongst retail investors,” he said.
Glyn said ESG funds were one of the few bright spots for active managers, particularly as they tended to come with higher fees than other actively managed funds.
Active equity funds overall saw outflows of 638 million pounds in July, while passive index-tracking funds saw inflows of 398 million pounds.
Safe-haven fixed income funds also saw inflows in July totalling 654 million pounds and have seen inflows for 14 of the last 16 months, Calastone said.
More than two thirds of UK-based fund flows by value pass across the Calastone network each month.
Reported by Carolyn Cohn