In Europe, in H1 2021, total sustainable fund flows surpassed the 2020 level and reached €237bn vs €231bn for the whole 2020. This is true for both active and passive funds (Source Morningstar 30/6/2021). Sustainable passive fund flows equal the 2020 record level at €59bn. Sustainable active fund flows surpassed the 2020 record level at €178bn.
𝐈𝐧 𝐟𝐢𝐱𝐞𝐝 𝐢𝐧𝐜𝐨𝐦𝐞, 𝐩𝐚𝐬𝐬𝐢𝐯𝐞 𝐟𝐮𝐧𝐝𝐬 𝐬𝐡𝐨𝐰 𝐭𝐡𝐞 𝐬𝐭𝐫𝐨𝐧𝐠𝐞𝐬𝐭 𝐦𝐨𝐦𝐞𝐧𝐭𝐮𝐦.
Sustainable passive fixed income fund flows at €14bn surpassed the 2020 record level of €11bn by 27%. This represents 30% of sustainable fixed income fund flows in Europe at the end of H1 2021 vs less than 20% in 2020.
Fixed income passive funds are quickly expanding especially since the Covid 19 crisis last year. They offer an alternative form of engagement by influencing the way indices are built. Active fund flows on their side are sustained but still 20% below the 2020 level.
𝐈𝐧 𝐞𝐪𝐮𝐢𝐭𝐲, 𝐚𝐜𝐭𝐢𝐯𝐞 𝐟𝐮𝐧𝐝𝐬 𝐚𝐫𝐞 𝐬𝐭𝐫𝐨𝐧𝐠𝐥𝐲 𝐫𝐞𝐚𝐜𝐭𝐢𝐧𝐠 𝐭𝐨 𝐩𝐚𝐬𝐬𝐢𝐯𝐞 𝐜𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐨𝐧.
This trend has accelerated since the Covid 19. They already gathered €99bn of flows, i.e. the record level of 2020 flows. This compares to €12bn of flows in 2019. Passive fund started to attract interest earlier with €32bn of flows in 2019 and continue to be sustained with €45bn of flows in H1 2021 vs €48bn in 2020.
👉Even in sustainable funds, both active and passive have a role to play in portfolio.
Marlene Hassine Konqui