Assets invested in ESG ETFs and ETPs listed globally reached record USD227bn by end February 2021, reports ETFGI

ETFGI, a specialist independent research and consultancy firm covering trends in the global ETFs and ETPs ecosystem, has reported that assets invested in ESG ETFs and ETPs listed globally reached a record USD226.75 billion at the end of February.  

ESG ETFs gathered net inflows of USD20.87 billion during February, bringing year-to-date net inflows to a record USD40.67 billion which is much higher than the USD13.61 billion gathered at this point last year which was the prior record.  Assets invested in ESG ETFs and ETPs increased by 8.8 per cent from USD208.28 billion at the end of January 2021 to USD226.75 billion, according to ETFGI’s February 2021 ETF and ETP ESG industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service.   

“Despite a sell-off in the last week of the month, the S&P 500 gained of 2.76 per cent in February, driven by optimism on Covid-19 vaccines, as well as continued monetary and fiscal stimulus. Developed markets ex- the US ended the month up 2.50 per cent while Emerging markets were up by 1.50 per cent for the month. The leaders of the developed market in February were Hong Kong (6.03 per cent), Canada (5.66 per cent) and Spain (5.32 per cent),” according to Deborah Fuhr, managing partner, founder, and owner of ETFGI. 

Since the launch of the first ESG ETF/ETP in 2002, the iShares MSCI USA ESG Select ETF, the number and diversity of products have increased steadily. Globally there are 527 ESG ETFs and ETPs, with 1,537 listings, assets of USD226.75 billion, from 123 providers on listed 35 exchanges in 28 countries at the end of February. 

Substantial inflows can be attributed to the top 20 ETFs and ETPs ranked by net new assets, which collectively gathered USD12.54 billion at the end of February. SPDR Bloomberg SASB US Corporate ESG UCITS ETF - Acc (SPPU US) gathered USD5.54 billion. 

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 per cent 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.