EPFR - fund flow & allocations data

Pace of Green - One fund steals march in Mexican ESG

It’s amazing how much money one fund can gather when it hits a sweet spot. Last month, money poured into the Mexican ESG category, continuing a strong run that started in August last year, according to EPFR data. But all these flows were driven by just one exchange-traded fund (ETF) - iShares ESG MSCI Mexico...

Topic Industry News ESG

EPFR - fund flow & allocations data

EPFR – Rebound vs. Recovery; looking beyond reflation

Looking beyond reflation… Coming into 2021 investors were seeking exposure to the green-tinged global reflation story they expect in the second half of this year and hedging against the inflation they fear will accompany renewed growth. This tension between reflationary and inflationary expectations also kept volatility in the spotlight. These themes have persisted during the first quarter. Equity funds with global mandates have posted inflows every week year-to-date, as have equity and bond funds with funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates. At the same time Inflation Protected Bond Funds have absorbed fresh money for 20 straight weeks and Bank Loan Funds, traditionally used to play rising short-term interest rates, for 14 consecutive weeks...

Topic Global Investment Flows ESG

EPFR - fund flow & allocations data

Waiting to read the writing on the wall

Markets moved sideways – albeit at elevated levels -- and money piled up in US liquidity funds for much of the week ending April 28 as investors waited on a slew of key earnings reports, the conclusion of the US Federal Reserve’s latest policy meeting and US President Joe Biden’s address to both Houses of Congress. Some compelling earnings reports from technology bellwethers drove US indexes to new record highs as the latest reporting period wound down. While largely marking time, investors did stick to their recent game plan of buying exposure to global and US growth, taking out insurance against higher inflation, greening their portfolios and keeping cash on hand. US Equity Funds posted their 11th inflow in the past 12 weeks, Global Equity Funds extended their longest inflow streak since 2017, combined year-to-date flows into Equity and Bond Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates moved north of the $150 billion mark and Inflation Protected Bond Funds chalked up their 23rd consecutive inflow. Overall, EPFR-tracked Equity Funds absorbed a net $10.5 billion during the fourth week of April – with Dividend Equity Funds extending their longest run of inflows since 4Q19 -- while Balanced Funds took in $685 million, Alternative Funds $1.3 billion and Bond Funds $13.7 billion. Money Market Funds, despite the biggest weekly outflow from Japan Money Market Funds since late 4Q18, pulled in $57.3 billion as they chalked up their eighth collective inflow in the last 10 weeks

Topic Industry News ESG

EPFR - fund flow & allocations data

Pace of Green - Swiss ESG bonds ride market wave but buyers should beware

ESG funds soaked up inflows again in March, and the Swiss bond market was the biggest sponge. Swiss environmental, social and governance (ESG) bond funds attracted a whopping $1.3 billion new investments, 9.1% of its total assets under management. This took total Swiss-based ESG bond assets to over $15 billion, according to fund flow data from EPFR. Swiss ESG bonds have received positive inflows in each of the last 12 months except one. But this momentum accelerated in February, when the Swiss stock exchange (SIX) launched 20 new ESG bond indices, all based on the Swiss Bond Index. SIX also introduced a filter system allowing investors to search for green, sustainability or sustainability-linked bonds...

Topic Industry News ESG

EPFR - fund flow & allocations data

Flows following growth stories in mid-April

Investors went for big and growing during the second week of April. China Equity Funds rebounded from their first consecutive outflows since mid-3Q20 with their eighth biggest weekly inflow on record while US Equity Funds absorbed fresh money for the ninth time in the past 10 weeks and flows into UK Equity Funds hit a 51-week high. The world’s first, second and fifth largest economies are now expected to post full year growth in excess of 6%, 8% and 5% respectively. In addition to rewarding growth, investors continued to act on their assumptions that environmental, social and governance (ESG) principles will be, to significant degree, embedded in this and future growth, and that growth at this torrid pace will generate inflation. Year-to-date flows into SRI/ESG Equity Funds pushed over the $100 billion mark, Inflation Protected Bond Funds saw net flows since their current inflow streak began hit $32 billion and Bank Loan Funds took in fresh money for the 15th straight week. Overall, EPFR-tracked Bond Funds absorbed a net $17.8 billion during the week ending April 14 versus $190 million for Alternative Funds, $3.8 billion – a one-year high – for Balanced Funds and $25.6 billion for Equity Funds. Redemptions from Money Market Funds were the largest since the second week of 3Q20, which also preceded a major US tax deadline.

Topic Industry News ESG

EPFR - fund flow & allocations data

Pace of Green - Global ESG standards seek cohesion, but face uphill challenge

The massive flows of money into environmental, social and governance (ESG) investments over 2020 continued into January and February, according to EPFR data. But, without better ESG reporting standards, this wave of money will fall short of the desired impact. Sustainable investing has long been hampered by patchy or confusing measurement and reporting, leaving the door open for some asset managers to make overly positive claims about the impact of their activities. As sustainable investing becomes more mainstream, investors will demand better, more standardized and comparable information. Asset managers, and those that guide and regulate them, will have to respond. But one major obstacle is the bewildering plethora of ESG standards and metrics that already exist. Turning these into a simple, cohesive set of standards could be like turning round a huge old tanker in a hurricane...

Topic Industry News ESG

EPFR - fund flow & allocations data

Volatility really could be different this time

After lying dormant for nearly a decade, volatility has started to rumble again. But the nature of volatility has changed, creating dangers and opportunities for investors. Market price swings have increased significantly since the start of the Covid-19 pandemic early last year. The volatility of global shares nearly tripled between 2019 and 2020; and the CBOE Volatility Index (Vix) remains at heightened levels compared to the last nine years. This comes when the world’s central banks have fired off unprecedented amounts of policy ammunition; the pandemic has injected uncertainty into daily life; environmental, social and governance (ESG) principles are disrupting long-established business models; and many assets have record-high prices. While some active managers may welcome greater volatility as a chance to display their tactical skills, most investors would rather it stayed low - especially the growing cohort of retirees. But how different will volatility be in the coming 18 months? And what are the options for avoiding it?

Topic Industry News ESG

EPFR - fund flow & allocations data

EPFR's 2021 Q1 wrap - Reflation, Inflation & Volatility

The first quarter of 2021 saw the global reflation vs. inflation story develop. February brought with it a record number of flows into equity funds and as we move through March, our research team continues to compile EPFR-tracked fund flows and allocations data to ascertain whether global reflation will trigger higher-than-expected inflation. During our webinar, our panel of experts recap the data analysis of Q1 2021, and conclude with insight into our most recent ‘volatility’ indicator – which assesses the speed of rotation across - asset classes, countries, sectors, FX currencies, long and short bond duration and, SRI/ESG. - suggesting that volatility is indeed picking up. They also offer their thoughts on the market rebound vs. recovery conundrum– which we believe will gain momentum over the next few months.

Topic Industry News ESG