ESG platforms critical for success in next decade, says survey

ESG investingThe future for the funds industry is green, suggests recently published research.

A survey of European asset managers carried out by Funds Europe in partnership with Citi, found that more than half (51%) believe that having an ESG platform will be critical to their success this decade.

The survey canvassed 88 asset management professionals for their views on how Europe’s asset management landscape will change over the next decade.

More than a third of respondents (37%) ranked ESG funds as the product likely to experience the most growth in that period.

“Increasingly, investors are pushing for ESG or sustainable products, and it’s not just ‘millennial’ retail investors,” said Sanjiv Sawhney, global head of custody and fund Services at Citi. “Institutional investors and pension funds are also demanding more sustainable solutions.”

The survey also showed that ETFs still remain popular with investors thanks to their low cost and efficient and were cited by 31% of respondents as the product type most likely to grow over the next ten years.

This raises the possibility that ESG-themed ETFs will be the most fertile ground for fund managers in the decade to come.

According to Deutsche Boerse, ETFs focused on ESG factors experienced huge growth in the first half of 2021. Monthly turnover averaged nearly €3 billion, trebling the volume of a year previously.

Meanwhile, the exchange’s electronic trading platform Xetra stated that ESG ETFs account for as much as 16% of ETF trading turnover, up from 6% a year ago.

The full research report, ‘The changing European fund landscape’, can be accessed here.

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