Green funds rise 600%+ in May, SRI 10% of funds market sales in 2007

Green fund sector enjoys renewal after sell-off earlier this year; SRI moving rapidly to the mainstream.

Sales of SRI mutual funds hit €9.3bn ($14.5bn) in Europe last year, representing 10% of total sales on the continent, indicating that they are rapidly moving from “niche to mainstream”, according to figures from Lipper Feri, the investment data group. The rise means that SRI mutual fund assets have now more than tripled since 2002 and reached €40.4bn in May 2008. Despite the growth, SRI funds still account for less than 1% of the total European retail funds market. However, fund managers appear to be betting the growth will continue on the back of increasing interest in renewable energy and water funds. Since the end of 2006, managers have launched 105 funds, bringing the total on sale in Europe to 498. Between 2002 and 2006 there were fewer than 20 new SRI funds launched per annum.
Lipper Feri said the leading markets in terms of SRI fund sales in 2007 were Belgium (€1.5bn in sales), France (€909m) and Switzerland (€445m).
It said the top three sellers in Belgium are Natixis, the French fund manager which runs €3.4bn in Belgian SRI fund assets, followed by Belgian peers KBC (€3.2bn) and Dexia (€1.6bn).The best selling funds over the last year have been in the water, renewable energy/climate change and eco/environmental equities sectors. But SRI funds with capital guarantees have remained the biggest funds thanks to considerable appetite from French and Belgian investors. Notably, SRI money market funds also grew by 90% in the last year.
Green funds enjoyed a considerable hike in sales during May this year, according to figures compiled for Responsible Investor by Lipper FERI. Total sales for the sector reached €758.2m for the month, a rise of more than 600% on sales in April of €118.4m. The spectacular climb indicates a revival of confidence in the green theme following March’s huge sell-off, which saw asset withdrawals of €293m ($453m) from the sector as a result of serious investor concerns about return prospects. One notable big seller for the month was Ikano, the Luxembourg-based multi-manager’s Alternative Energy and Water Fund, which grossed €199.1m for the month, making it the second biggest seller in May. Swiss manager SAM’s Sustainable Water fund was the biggest green seller taking in €258.4m during the month. See downloads – left column