Morningstar Asia reported a record $5 billion in inflows to sustainable funds in Asia for the fourth quarter 2020, boosting ESG asset totals to $25.4 billion by year-end, up 131% over the past 12 months.
Sustainable funds offered to mainland Chinese investors accounted for $3.9 billion, or 77% of the total, followed by South Korean funds, with $573.5 million; Indian funds, with $496.7 million; and Taiwanese funds, with $102.9 million. The remainder was made up of other countries in the region.
The latest inflow numbers point to growing investor interest in "sustainable and resilient business models" in the wake of the disruptions caused by the coronavirus pandemic, Hortense Bioy, Morningstar's director of sustainability research, Europe, Middle East and Africa and Asia-Pacific, said in a news release.
William Chow, Morningstar's Hong Kong-based director of manager research, said in an interview that the latest Morningstar data only accounts for 60% of Chinese fund data, which requires a bit more time to tabulate, so if anything the numbers announced Friday understate the gains sustainable funds posted for the latest quarter.
Looking at year-on-year gains in total sustainable fund assets for the region, Taiwan's $2.9 billion as of the end of 2020 led the way with a 336% surge; followed by India, with a 210% increase to $1.3 billion; and China, up 150% to $18 billion.
Mr. Chow said markets in the region launched 43 new sustainable funds in 2020, up from 27 the year before.
He said the torrid growth in Taiwan's sustainable fund assets could have been helped by a spate of new sustainable fixed-income offerings there. Of 11 funds launches in Taiwan, seven were fixed-income funds.
For the entire region, there was only one sustainable fixed-income launch in 2019. There were 12 launches in 2020, with five in South Korea in addition to Taiwan's launches.