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Good Money Week: HL investors back ESG funds with record breaking flows

Investors have put record money into Responsible funds on the HL platform with net flows up 17% so far in 2021 vs the same period in 2020

Emma Wall, Head of Investment Analysis at Hargreaves Lansdown says:

“2020 was a record-breaking year for flows into sustainable, ethical, ESG and impact funds. Strong relative and absolute performance helped push funds in front of previously sceptical investors’ eyes, while both the pandemic and associated lockdown brought environmental and social issues to the top of the news agenda. Expectations for 2021 flows were therefore muted after such a strong preceding year, but once again HL clients have put their money where their morals are and in-flows to responsible investment funds have hit yet another record high. The naysayers are calling a bubble, but many companies held in responsible investment funds – both active and passive – are the beneficiaries of long-term structural trends. Yes the past 18 months has accelerated certain social and economic movements, but the new norm of e-commerce, low-carbon, flexi-working, re-use and repair households are here to stay – as is investors holding businesses accountable for their actions and impact. Investing with environmental, social and governance issues in mind is about more than just doing the right thing however. It is about doing the long-term profitable thing. Being risk aware, horizon scanning and building sustainable portfolios with sustainable profits and dividends.”

Net flows into ESG funds by year

Year-on-year increase
2016 Base year
2017 173.83%
2018 37.33%
2019 248.14%
2020 222.02%
2021 (so far) 17.48%

 

Net flows into active ESG funds by year

  Year-on-year increase
2016 Base year
2017 184%
2018 35%
2019 257%
2020 217%
2021 (so far) -7%

 

Net flows into passive ESG funds by year

  Year-on-year increase
2016 Base year
2017 240%
2018 14%
2019 68%
2020 212%
2021 (so far) 966%

 

Demographic breakdown

Top active ESG funds 2016 – 2021 (alphabetical)
Aegon Ethical Equity Fund
Baillie Gifford Global Stewardship
Fundsmith Sustainable Equity
Liontrust SF Global Growth
Royal London Sustainable World

 

Top passive ESG funds 2016 – 2021 (alphabetical)
Legal & General Future World Climate Change Equity
Legal & General Future World ESG Developed Index
Vanguard ESG Developed World All Cap Equity
Vanguard ESG Developed World All Cap Equity Index
Vanguard SRI Global Stock

 

Most popular ESG funds on the HL Platform 2021 (by total net flow, alphabetical order)

Top ESG funds 2021 to date (alphabetical)
Aegon Ethical Equity Fund
BNY Mellon Sustainable Real Return
Fundsmith Sustainable Equity
Guinness Sustainable Energy
Legal & General Future World ESG Developed Index
Liontrust SF Global Growth
Ninety One Global Environment
Royal London Sustainable World
Stewart Inv Indian Subcontinent Sustainability
Vanguard ESG Developed World All Cap Equity

 

HL data provided correct as of 21/09/2021.

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