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Investor interest in equity funds with social responsible (SI) or environmental, social and governance (ESG) mandates continues to grow, according to data from EPFR global.
“A week after they posted their third inflow record since the beginning of September, [ SRI and ESG funds ] took in another $2 billion coming into December as they extended an inflow streak stretching back to the first week of the year,” wrote Cameron Brandt, director of research at EPFR Global in a Thursday note to clients. “Assets managed by these funds now total over $500 billion, a more than six-fold increase since the fourth quarter of 2015.”
The rising interest in socially conscious investing is especially apparent when compared against the cumulative outflows from global equity funds in 2019, despite equities being on pace for their best year since 2013. Stellar returns from the Dow Jones Industrial Average DJIA, +1.19%, S&P 500 index SPX, +1.00% and the Nasdaq Composite Index COMP, +0.97% have perplexed some analysts, though the trend has been reversing in recent weeks.
Developed market equity funds absorbed $7.2 billion in the seven days ended Dec. 4, according to EPFR, their fifth week of inflows in the past six.
On a sector level, technology, utilities, infrastructure, health care and real estate all attracted fresh money, with tech inflows nearing their 2018 highs, according to a Bank of America analysis of the data.
Flows into financial-sector funds, industrial and energy-sector funds, meanwhile, saw outflows, with financial funds snapping an eight-week inflow streak, “as speculation that a trade deal between China and US could be pushed off to the fourth quarter of 2020 put pressure on the yield spreads that contribute to financial-sector profits,” Brandt wrote.
