IA reports record £7.1bn flows into responsible investment funds in 2020 so far

sustainable investment for growth
Sustainable investment

UK savers put £5.3 billion into retail funds in Q3 2020, more than three times the net retail sales of Q3 2019 (£1.2bn), according to latest figures published this week by the Investment Association (IA). The other key findings are:

  • Responsible investment funds saw net retail sales of £7.1bn for the year-to-date. This is up from £1.9bn for the first three quarters of 2019.
  • Bond funds continued to see strong net retail sales reaching £1.2 billion in September, boosted by the Global Bond sector’s record sales of £937m.
  • Active funds saw positive net retail sales of £336m in September 2020, while net retail sales to tracker funds remained consistently strong at £1.3bn.

Chris Cummings, Chief Executive of the Investment Association, said:

“The year so far has seen record investment into responsible investment funds, with over £7bn invested into funds which consider their wider impact on the world. In a year clouded by uncertainty, responsible investment funds are a beacon for how savers can put their money to work to support positive change globally, and our industry can be proud that these funds are reaching new heights of popularity.

“It is also heartening that since the significant outflows in March, net retail sales have continued to recover into September. It remains to be seen just how significantly new COVID-19 restrictions and lockdowns imposed across the UK and internationally will affect investor behaviour as we head towards the end of 2020.”

Adrian Lowcock, head of personal investing at investment platform Willis Owen comments: 

“ESG and socially responsible investment funds have been the overwhelming winner since the pandemic, and this has continued in the third quarter of the year.

“Whether the 270% jump in flows year-on-year into ESG funds is itself sustainable is not yet clear, but there is no denying that, given the scale of investment throughout the year, this feels like a longer-term shift in mindset rather than a kneejerk trade.

“Conversely, country-specific equity funds – in particular those investing in the UK – continue to struggle, and it is thanks to the strength of inflows into sustainable mandates that overall outflows from equities weren’t higher.”

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