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Innovation lacking in bond ESG ETFs, survey finds

ESG_investingOver 80% of professional investors want to see more innovation in fixed income ESG ETFs, according to a survey commissioned by the London-based specialist fixed income ETF provider Tabula Investment Management.

“We found that 96% of investors that we surveyed are already using ESG ETFs, which is a remarkable level of penetration in only a few years,” said Tabula chief executive Michael John Lytle.

“However, in fixed income specifically, the vast majority of respondents want to see more innovation, broader coverage of exposures and more transparency around the effect of the fund’s approach.”

The research also sheds light on specific features that professional investors look for in ESG ETFs. The top answer, cited by over 70% of respondents, was the exclusion of the most harmful companies.

“The idea of avoiding harm is clearly at the forefront of investors’ minds and the exclusion of certain companies – for example, those violating the UN Global Compact or manufacturing controversial weapons – is becoming a minimum requirement,” said Lytle.

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