ETFGI reports Environmental, Social, and Governance (ESG) ETFs and ETPS listed globally gather net inflows of US$679 Million during December 2018

Total assets invested ESG ETFs and ETPs decreased by 3.20% from US$23.22 billion at the end of November, to US$22.47 billion, according to ETFGI’s December 2018 ETF and ETP ESG industry landscape insights report, an annual paid-for research subscription service.  

“The end of 2018 saw the trend in developed markets reverse, and although arguably predictable, the severity left many pundits scratching their heads. This end of year stress has widely been attributed to the disruption caused by trade disputes feeding into economic data, and the view policy makers are not going to be quite as accommodating as initially expected. The S&P 500 returned -9.03% during December, and down -4.38% for 2018. Developed markets ex-US fell -4.62% during December, led by Japan and Canada, bringing the yearly return to -13.21%. Relatively speaking, EM and FM fared the month better, returning -2.68% and -3.15%, finishing 2018 -13.53% and -11.82%, respectively” according to Deborah Fuhr, managing partner and founder of ETFGI.

At the end of December 2018, there were 208 ESG classified ETFs/ETPs, with 492 listings, assets of $22.47 Bn, from 61 providers listed on 26 exchanges in 23 countries. Following net inflows of $679 Mn and market moves during the month, assets invested in ESG ETFs/ETPs listed globally decreased 3.20%, from $23.22 Bn at the end of November 2018, to $22.47 Bn.

Global ESG ETF and ETP asset growth as at end of December 2018

Since the launch of the first ESG ETF/ETP in 2002, the iShares MSCI USA ESG Select ETF, the number and diversity of products has increased steadily, with 208 ESG ETFs/ETPs listed globally at the end of 2018. 70 new ESG ETFs/ETPs have launched by 27 providers during 2018, with 4 during December alone.

Substantial inflows during December can be attributed to the top 20 ESG ETFs/ETPs by net new assets, which collectively gathered $732 Mn during December. The iShares MSCI USA SRI UCITS ETF (SUAS LN) gathered $158 Mn, the largest net inflow in December.

Top 20 ESG ETFs/ETPs by net new assets December 2018

Confusion persists around what constitutes an ESG fund. According to PRI, a UN-supported initiative which seeks to understand the investment implications of ESG issues, 56% of adopters believe there is a lack of clarity in ESG definitions. ETFGI’s classification system attempts to provide greater precision, with ETFs/ETPs listed globally organised into categories, including core ESG products and theme-based groups, such as Clean/Alternative Energies and Gender Diversity.