Equity funds take majority of sustainable inflows in 2023

investmentweek.co.uk:

Over the same time period, equity funds experienced £16.4bn of ‘conventional’ outflows.

Of those, just over £2bn of inflows were added in the third quarter. Over the same time period, equity funds also experienced £16.4bn of ‘conventional' outflows.

LSEG Lipper found flows in the other asset classes over the three quarters were «muted», with bonds taking in £1.1bn in sustainable inflows, while conventional peers netted ten times more at £11.2bn.

Sustainable money market funds gathered around £800m over the nine months, while conventional peers shed £54.5bn, likely a result of pension funds redeploying cash towards safer holdings, Lipper said. 

Similarly, both sustainable real estate and alternatives were in the green over the period, with £159m and £72m of inflows, respectively, despite negative flows for their conventional counterparts.

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Between January and September 2023, the only asset class that suffered outflows was mixed assets, losing £75m in the year to date, and £276m over the third quarter.

The best-selling sectors over the period were Equity Global (£5.3bn), Equity US (£4.1bn) and Equity Emerging Markets Global (£1.3bn), with all three attracting more flows than their conventional counterparts, whereas the conventional Equity US lost £5.7bn over the three quarters.

Dewi John, head of research, UK & Ireland, for LSEG Lipper, said: «The outflows from conventional US funds are a continuation of that seen in previous quarters, while the classification saw the highest inflows for Q3, at £1.4bn — which seems a little odd, given that the US equity fund market has not been a traditional home of ESG.

»That is changing. A quick scan through the top ESG money