Green funds suffer major sell-off

Almost €300m pulled from sector as investors question potential returns.

Green funds saw huge sell-offs in March with funds in the sector recording €293m ($453m) in asset withdrawals, suggesting serious investor concerns about their return prospects, according to figures compiled for Responsible Investor by Lipper FERI, the investment data group.
In the ranking for funds investing in sectors with so-called ‘green’ themes such as the environment, water, climate change and renewable energy, the biggest grossing fund for March was Swiss manager Sarasin’s New Power Fund, which collected an estimated €30.4m, while fellow Swiss manager Swisscanto’s Equity Climate Invest fund gathered €24.5m. However, the sector was hit with large withdrawals overall. Investors in funds outside of the top 10 sellers pulled €409m from fund managers. In terms of overall assets the biggest ‘green’ fund remains Blackrock’s MLIIF– New Energy Fund with €4.18bn in assets. In second place is Pictet’s Water Fund with just under €3.2bn. Third in size is Julius Baer’s SAM Sustainable Water Fund with €1.5bn. All three funds recorded outflows over the month.
Belgian fund manager KBC maintained its recent strongrun of sales in funds labelled “SRI” by securing the three top slots for investment in March, The KBC EquiPlus Head Start Sustainables 04 grossed an estimated net €302.2m, more than four times the second placed fund, KBC’s own EquiSelect Sustainables Short Term USD 02 fund, which recorded sales of €69.4m. Third placed was the firm’s EquiSelect Sustainables Short Term USD 01 with sales of €57.2m. The top five sellers included funds from Natixis, the French manager and Sarasin in Switzerland. Overall sales for the SRI sector, however, remained damp, with fund managers outside the top 20 losing a total of €397m. KBC has introduced a number of important environmental initiatives over the past year to its own operations, including guidelines to make new building projects as carbon neutral as possible and achieve carbon neutrality in Belgium by 2010 as well as using green power exclusively from March this year. Julius Baer’s SAM Sustainable Water Fund became the largest pure classified SRI fund during the month with €1.52bn in assets, leapfrogging the AGF Valeurs Durables, part of Allianz Global Investors, which now manages €1.25bn.