Global ESG funds see highest inflows on record, giving hope for active managers as equity funds overall suffer outflows in July ______

10 Aug 2020

Equity funds suffered a second consecutive month of outflows in July, while fixed income funds enjoyed another month of strong inflows, according to the latest Fund Flow Index from Calastone, the largest global funds network. Overall, equity funds shed £240m in July, but ESG and global funds proved to be successful, not least because most ESG funds are global.

Key highlights from this month’s FFI:

  • Growing investor interest in ESG sees record inflows in July of £362m.
  • Each of the previous four months set a new record for ESG equity fund inflows, plus the total £1.2bn inflows into ESG since April is greater than all previous five years combined on record.
  • ESG equities buck the trend of outflows from equity funds overall in July, offering some relief to active fund managers – ESG funds currently the main area of real strength for active funds
  • ESG funds have accounted for one third of inflows to global funds overall in the previous year – as ESG funds are usually globally-focused
  • Global funds are also benefitting from investor preference for “growth” rather than “value” holdings
  • Outflows from UK-focused funds and income funds are the other side of the same coin – on account of dividend suspensions, negative interest rates and unfavourable macro environment for “value stocks”

To view this edition of the FFI in full, please go here

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