Looking for hidden ESG gems
Looking for hidden ESG gems: a new frontier for responsible investing with “improvers”
The ongoing Covid-19 crisis is likely to bear long-term consequences on equity investing, reinforcing the ESG vs. traditional non-ESG equity divide, with the former enjoying large structural demand.
Such trends emerge from the 2020 fund flows data available thus far, which show significant outflows from non-ESG equity funds, as investors have de-risked portfolios in the wake of the pandemic-related market sell-off.
However, strong market volatility has not derailed the large structural demand for ESG equity funds, which have proved resilient, enjoying consistently strong inflows.
To put it simply, there are steady asset inflows into responsible companies which have not been worn away by the crisis and involve both active and passive ESG equity funds. For reference, the year-to-date ESG equity funds inflows have already beaten the inflows recorded in 2018 as a whole.
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