Financial advisers have significantly increased their focus on sustainable and responsible funds since the Covid-19 pandemic, leading industry statistics from FE fundinfo has shown.
According to data from FE Analytics – taken from research stats for the first three months of each year between 2019 and 2023 – sustainable funds now account for a larger proportion of the top 25 researched funds within the IA Global universe.
In 2019, only 28% (seven out of 25 funds) of the top 25 researched funds were environmentally-minded while this year that figure has risen to 44% (11 out of 25 funds). 2021 saw the highest number of sustainable funds make the list when just under half (48% or 12 funds) made the top 25.
|
First quarter of year (1 Jan – 31 March) |
Number of sustainable funds in top 25 most research in IA Global |
Percentage of top 25 researched funds |
Percentage of top 10 researched funds |
|
2023 |
11 |
44% |
40% |
|
2022 |
11 |
44% |
40% |
|
2021 |
12 |
48% |
40% |
|
2020 |
9 |
36% |
30% |
|
2019 |
7 |
28% |
30% |
The news follows global trends towards more companies becoming environmentally-minded with a greater focus being shown by investors and their clients in environmental, social and governance (ESG) matters.
Additionally, the searches could also have been generated by advisers looking to understand each fund better as a lot of environmentally-friendly funds have underperformed in recent years.
Over the last five years, performance of many sustainable equity funds has been good. However, this performance has tailed off over the last two years. For the year to 31 March 2023 all four sustainable funds in the top 10 most researched funds in the IA Global sector underperformed the sector average. Baillie Gifford Positive Change and Liontrust Sustainable Future Global Growth fund also underperformed the sector average in the 12 months to the end of March 2022.
|
Fund name |
31/03/2022 to 31/03/2023 |
31/03/2021 to 31/03/2022 |
31/03/2020 to 31/03/2021 |
31/03/2019 to 31/03/2020 |
31/03/2018 to 31/03/2019 |
|
Baillie Gifford Positive Change fund |
-9.32 |
2.06 |
79.30 |
15.93 |
11.01 |
|
Columbia Threadneedle Responsible Global Equity fund |
-5.44 |
9.80 |
40.31 |
1.72 |
12.83 |
|
Janus Henderson Global Sustainable Equity fund |
-3.91 |
10.99 |
44.24 |
7.19 |
8.98 |
|
Liontrust Sustainable Future Global Growth fund |
-8.20 |
5.71 |
42.74 |
3.27 |
18.95 |
|
IA Global TR in GB |
-2.65 |
8.39 |
40.59 |
-6.04 |
8.97 |
Top ranked researched funds
In 2023, the third most researched fund within the IA Global sector – the top ranked sector for the opening three months of the year – was Janus Henderson’s Global Sustainable Equity).
Also making it into the top ten, were Baillie Gifford’s Positive Change fund, Liontrust’s Sustainable Future Global Growth and Columbia Threadneedle’s Responsible Global Equity who ranked fifth, sixth and eight respectively.
Compared to 2019, ASI’s Global Sustainable and Responsible Investment Equity also ranked third in the list, with only Columbia Threadneedle’s Responsible Global Equity (eighth) and Janus Henderson’s Global Sustainable Equity (ninth) funds ranking in the top 10.
For the best year – 2021 – four funds made the top ten of the most researched list. Baillie Gifford’s Positive Change fund ranked fourth, Liontrust’s Sustainable Future Global Growth ranked fifth, Janus Henderson’s Global Sustainable Equity ranked sixth and Columbia Threadneedle’s Responsible Global Equity ranked ninth.
Charles Younes, Research Manager, FE fundinfo, said:
“The need for firms to invest in sustainably-minded ways has grown in recent years with the increased interest and scrutiny in company’s commitments to ESG. In the past few years, especially, this has been heightened even further and we are seeing advisers research greater numbers of funds that meet their clients environmentally-conscious investment requirements.
“During the Covid-19 pandemic there was a noticeable increase in interest in responsible and sustainable investing. Regulatory initiatives and changed investor attitudes mean this appears to be a long-term change.”
Data from FE Analytics is trusted by more than 3,900 independent financial advice firms for all their fund research and analysis. It enables them to have a holistic view of their entire investment proposition, ensuring investment suitability and supporting them to demonstrate the value of their investment proposition to their clients.
With over 300,000 portfolios and instruments to browse and compare, including UT & OEICS, ITs, Offshore, Onshore and DFMs, clients can easily shortlist funds based on suitability criteria.
