Morningstar: ESG Funds Resilient During COVID-19 Sell-Off

Morningstar: ESG Funds Resilient During COVID-19 Sell-Off

ESG-investing
Duurzaam (4) klimaat.jpg

Sustainable investing has gained considerable traction and attention over the past three years. Despite the recent market volatility hurting funds across the board, sustainable funds have continued to attract interest among investors, according to Morningstar.

In their first-ever Global Sustainable Fund Flows Report, Morningstar’s sustainability research team found that global demand for ESG is standing strong and proving resilient amid the COVID-19 market sell-off. In the first quarter of 2020, Morningstar found that the global sustainable fund universe collected inflows of $45.7 billion, compared with outflows of $384.7 billion for the overall fund universe. 

The report takes a deep dive into regional sustainable fund flows and more, including:

  • Global sustainable fund assets stood at $837 billion as of end of March, down 12% from an all-time high of $960 billion at the close of 2019. Assets in the global fund universe took a greater hit, declining by 18%.
  • Europe continued to dominate the space, housing 76% of the global sustainable offerings and 81% of the assets, but investor interest in other regions is growing. The United States accounted for a higher proportion of global inflows compared with previous quarters.
  • Product development in the first quarter of 2020 also stood strong, with 102 new offerings. Asset managers also continued to repurpose conventional products into sustainable funds. In Europe, 24 funds converted and rebranded over the quarter to make their new sustainable mandates more visible to the public.