Category: Thematic investing

The European Securities and Markets Authority (ESMA) has found that retail ESG equity funds are, on average, cheaper than their non-ESG equivalents. However, its annual report on retail investment products also notes that “the charging of additional fees may be justified” for ESG funds due to the costs of procuring sustainability data and developing in-house expertise. Additionally, products with high ESG ratings were found to have performed better over 2019 compared to lower-rated products, although this was attributed by the regulator to “sectoral factors”.

Flows into ESG funds in March slowed slightly following record highs in December, but were still the third highest level on record at $53bn, according to research by Morgan Stanley. Flows into ESG ETFs fell to $9.8bn. In the first quarter of 2021, $275bn in ESG-labelled debt was issued, with $133bn of issuance in March, of which 84% was green and social bonds.

Impax Asset Management …