Exchange traded funds (ETFs) and exchange traded products (ETPs) with environmental, social and governance (ESG) themes listed globally attracted net inflows of US$3.49 billion in June, bringing year-to-date net inflows to US$32.02 billion, research and consultancy firm ETFGI reports. The January-June inflow was significantly bigger than the US$9.86 billion gathered in the same period in 2019.
Assets invested in ESG ETFs and ETPs rose by 7.3% from US$82 billion at the end of May to reach a fresh record of US$88 billion at the end of June, according to the ETFGI report, a paid-for research subscription service. Products domiciled in Europe accounted for 50.9% of overall ESG assets, followed by those in the US with 40.5% and Asia Pacific ex-Japan with 5.8% of the assets.
Deborah Fuhr, managing partner, founder and owner of ETFGI, notes that US equities staged a recovery in the second quarter from the previous quarter’s decline, with the S&P 500 gaining 1.99% in June. ”Although Covid cases in the US are still increasing, the stimulus from the Fed and Congress aided the market rebound,” says Fuhr.
Developed markets outside the US rose 3.44% in June and were up 16.8% in the second quarter. The top performers were Hong Kong, up 11.35%, New Zealand 10.09%, the Netherlands 8%, and Germany (up 6.08%). Emerging markets gained 7.6% in June and were up 19.3% in the second quarter, adds Fuhr.
Since the launch of the first ESG ETF/ETP in 2002, the iShares MSCI USA ESG Select ETF, the number and diversity of products have increased steadily. The global ESG ETF/ETP industry now has 369 ETFs/ETPs, with 1,019 listings from 89 providers on 31 exchanges in 25 countries, according to ETFGI. In June alone, 21 new ESG ETFs/ETPs were launched.