Friday Funds: Assets in sustainable funds smash $1trn

The latest developments in ESG-related funds

Global inflows into sustainable funds were up 72% in the second quarter of 2020 to $71.1bn, according to figures from Morningstar, with assets smashing through the $1trn mark. Europe saw the lion’s share at 86% of the global inflows, while the US took in 14.6%. The report is based on 3,432 ESG open-end funds and ETFs.

Ninety One and WWF have collaborated to create the Climate and Nature Sovereign Index, based on country-level environmental risks. Already the Index has identified India, the Gulf Cooperation Council, Australia, Portugal and Greece as the countries with the most to benefit from a green recovery, with enhanced sustainability policies and recovery packages likely to improve their appeal to sovereign debt investors.

Switzerland’s Mirabaud Asset Management has renamed three funds to namecheck sustainability. The Mirabaud Equities Global Focus and Mirabaud Global Equity High Income funds are now the Mirabaud Sustainable Global Focus and Mirabaud Sustainable Global High Dividend funds; and the Mirabaud Convertible Bonds Global fund is the Mirabaud Sustainable Convertibles Global fund.

Generali has launched a sustainable infrastructure fund for retail investors. The GF Infrastructures Durables fund targets unlisted investments in infrastructure in Europe across social infrastructure (hospitals, schools, universities, etc.), carbon-free transport, the energy transition, and telecommunications.

Sea Change Foundation International, Wellspring Climate Initiative, High Tide Foundation, Grantham Foundation, Bloomberg Philanthropies, Packard Foundation and the Children’s Investment Fund Foundation have all seeded a clean energy fund for Indonesia, the Philippines and Vietnam. Currently at $10m, the South-East Asia Clean Energy Facility, managed by Singapore-based Clime Capital, hopes to attract an additional $40m in capital from foundations and development banks to mobilise billions in clean energy investment from the private sector. 

Over 80% of investors want to see more innovation in fixed income ESG ETFs, according to Tabula Investment Management. The fixed-income survey heard from European professional investors across seven countries, with more than 70% highlighting exclusion of the most harmful companies as the most salient product feature.

Franklin Templeton has launched two Paris Aligned Climate UCITS ETFs within its Franklin LibertySharesTM range. The Franklin STOXX Europe600 Paris Aligned Climate UCITS ETF and Franklin S&P500 Paris Aligned Climate UCITS ETF2 will provide European investors with a universe of stocks in line with the new EU benchmarking regulation.

Foresight Capital Management has launched the FP Foresight Sustainable Real Estate Securities Fund to invest into listed, highly liquid Real Estate Investment Trusts. Foresight is a dedicated sustainability house, and the fund is targeting 4% income yield.

Credit Suisse Asset Management has launched an ETF made up of large and medium-sized companies from 23 developed markets aligned with MSCI’s sustainability criteria. The swiss asset manager has listed it on the Deutsche Boerse and SIX Swiss; with a total expense ratio of 0.25%.

State Street Global Advisors has launched an ETF based on the S&P500, but with an ESG overlay. It has an expense ratio of 10 basis points.