Sustainable investment strategies gathered 52% of all European net new inflows in 2020, with assets in these products accounting for 11% of total AUM.
The inaugural European Sustainable Investment Funds Study by Morningstar, management consultancy zeb and the Association of the Luxembourg Fund Industry showed sustainable strategies accounted for 11% of a total €10.25 trillion ($12.59 trillion) in assets in Europe as of Dec. 31, up from representing 7% of a total €9.66 trillion a year earlier and 5% of a total €7.96 trillion as of Dec. 31, 2018.
In terms of net inflows, sustainable strategies attracted 52% of €414 billion in total net inflows in 2020, compared with 30% of €375 billion in 2019 and 22% of €172 billion in net inflows in 2018.
The study also found that almost one-third (32%) of the net assets invested in sustainable strategies were domiciled in Luxembourg in 2020, up from 31% in 2019 and 29% in 2018. Ireland followed, with 12% of sustainable assets domiciled in the country, up from 9% in 2019 and 7% in 2018.
The U.K. added assets, accounting for 8% of total assets in 2020 up from 6% the year before and 7% in 2018.
France, Sweden and the Netherlands lost ground, however. France's proportion dropped to 12% from 14% in 2019 and 15% in 2018; Sweden's fell to 12% from 16% last year and 15% in 2018; and the Netherlands dropped to 4% from 6% and 7%, respectively. The remainder of assets were domiciled in Germany, Switzerland and other countries.
"Despite differences and nuances of approach across jurisdictions, asset classes and investment styles, the trend towards sustainable funds has reached a point of no return, with sustainable funds attracting more than half of net new flows in 2020," Marc-Andre Bechet, deputy director general of ALFI, said in a news release.
The study will be published next month.