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ESG – Facing The Future

The issues and challenges posed by the global climate emergency continue to hit the news headlines. The investment world is not immune to these challenges nor can it stand by without taking action. It can be little surprise to see the growing influence and importance of responsible investing and the surge of interest and support which it has now earned amongst advisers, planners and paraplanners. At IFA Magazine, we are strong supporters of this movement. If you want to find out more detail as to what is really going on, we extend a big welcome to you to come and join us and a range of subject experts at our upcoming events around the UK. At these events we will focus on the detail of Environmental, Social and Governance (ESG) investment and the particular challenges and opportunities which it presents.

If you’re an adviser, paraplanner, asset allocator or investment manager in the UK today, issues of responsible or sustainable investing will be firmly on your agenda. Clients’ attitudes are changing. Not only is their day to day behaviour changing to reflect the pressing climate emergency which we face but their financial planning and investment needs are also not exempt from this. Action is needed.

But don’t just take our word for it. Let’s take a look at the detail. Recently, Morningstar Manager Research released their latest Quarterly European Sustainable Fund Flows data and commentary for Q4 2019 and full year analysis. The results which their research revealed are compelling and provide clear evidence that this movement is having a significant impact on the world of investment. Below we highlight the key takeaways from the Morningstar research:

Key Takeaways Include:

• The European sustainable funds universe pulled in record inflows of EUR 120 billion in 2019, propelled by record-breaking inflows of EUR 47.3 billion in the fourth quarter.

• Assets in European sustainable funds closed the year at EUR 668 billion, up 56% from 2018.

• Product development showed no sign of abating. 105 new sustainable offerings were launched in the fourth quarter, bringing the total number of launches for 2019 to 360 and the overall number of sustainable funds domiciled in Europe to 2,405.

• More than 50 of the 360 funds launched in 2019 had an explicit climate-oriented mandate.

• Asset managers continued to repurpose and rebrand existing funds, while some expanded their exclusion lists.
A growing number of offerings, especially in the Nordics, are divesting from fossil fuels companies.

• Passive funds continued to gain market share. In the fourth quarter, index funds and exchange-traded funds garnered just shy of EUR 13 billion in sustainable fund flows, accounting for 27% of total quarterly flows. They now represent 21% of European sustainable fund assets.

Hortense Bioy is Director, Passive Strategies and Sustainability Research, Manager Research, at Morningstar Europe. He comments: “2019 was a big year for sustainable investing. Equally, it was a record-shattering year for European sustainable funds, driven by increasing investor interest in ESG issues and a favourable regulatory environment. As more investors look for ways to mitigate ESG risks—particularly climate risk—and align their investment portfolios with their values and sustainability preferences, we can expect the universe of sustainable funds and the money flowing into it to continue growing.”

Join The Debate – Book Your Place Now

The first IFA Magazine ESG seminar takes place on 24th March 2020. It will be hosted at the offices of M&G Investments, 10 Fenchurch Ave, Langbourn, London EC3M 5AG.

With fund managers, subject experts, advisers and paraplanners getting together, it promises to be an information dense, useful and practical session packed with detail on the whats and whys of investing responsibly as well as the looking at exactly how this can be done in order to achieve the best outcomes for clients.

The event will run from 10am until 1:30pm, to also include lunch and CPD.

To find out more and register, click here

Subsequent IFA Magazine ESG seminar events will be held in Birmingham in May, Manchester in June and Edinburgh in September and you can book your place at any of these events now.

We look forward to seeing you!

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