Sustainable AUM growth outpaced non-sustainable

European-domiciled funds focusing on sustainable investing grew $71 billion over the year ended June 30 to $1.06 trillion, with net inflows of $45.2 billion. Their non-sustainable counterparts added $151 billion during the year, $82.8 billion of which was net inflows, to stand at slightly less than $10 trillion. However, while the overall growth of the non-sustainable fund group was higher, it represented about 1.5% of July 2018 assets; sustainable funds grew 7.3% by the same metric.

Of the seventy-eight funds that were added to the European market during the second quarter, strategies focusing on active management engagement (64) were the most popular with another nine funds emphasizing low-carbon exposure.

Recent data from Morningstar show 2,928 ESG-focused funds in the European market place, 103 of which are exchange-traded funds.

The MSCI World ESG Leaders index returned 8.2% over the 12 months ended June 30, ahead of the MSCI World index's 6.9% return. The trailing three-year period tilts slightly in favor of the traditional global index: the MSCI World index rose 12.4% during the three years vs. the 12% return of the ESG index. (All returns are on a total return basis, and three-year periods are annualized.)