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ESG fund flows gain half of market share

ESG funds, Lipper RefinitivJust over half of fund flows in Europe last year went into ESG products – with investors showing a strong preference for actively managed ESG funds.

In total, 50.46% of inflows into European funds were invested in ESG-related funds last year. 

Overall fund flows totalled €574.3 billion – the second largest figure in the industry’s history, according to Refinitiv Lipper.

Stripping out funds such as money markets and commodities where ESG implementation is at best low, then in vanilla equity, bond and multi-asset funds the percentage of ESG inflows reached 70.15% in 2020.

However, ESG funds still only represented 15% of assets under management in Europe at the end of the year, with €2 trillion invested in them.

Detlef Glow, head of Emea research at Refinitiv Lipper, said in a report: “Generally speaking, it is clear that the assets under management in funds which have implemented an ESG-related management approach are still way behind their conventional peers, as the trend toward sustainable investments has only become highly popular with all kinds of investors in the last few years.” 

Glow also said AUM of ESG products was 83% in favour of active funds.

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