The list of U.S. mutual funds and ETFs with an ESG focus grew by 23% over a year as of the second quarter, reaching 813 products.
That trend is coupled with a greater market share for passively managed funds which, as of the end of June, accounted for 23%, up from 20% a year prior, according to a report Monday from Cerulli Associates. The pace of new ESG-themed ETFs coming to market fueled that, with launches outpacing those of mutual funds, the company found.
Of the products on the market as of June, about 24% were ESG-integration funds, 48% were negative-screen funds and 28% were sustainability-themed funds. By comparison, about 29% of the funds in 2020 were ESG integration, 49% negative screening and 22% sustainability themed.
Despite the growth in the number of products, total assets in U.S. ESG ETFs and mutual funds are projected to be about $669bn by the end of 2022, which would be down 13% from the high of $768 billion at the end of 2021, according to Cerulli. The drop would be due to negative returns, rather than sales, with net flows for the products at $5.8 billion through the first half of the year. However, that is less than a tenth of the sales seen during the first six months of 2021, with more than $59 billion flowing into the products.
Last year, by comparison, net sales were more than $94 billion.
US ESG-themed funds could surpass total assets of $1 trillion in 2025, reaching an estimated $1.3 trillion by the end of 2027, the firm stated in the report. By then, 43% of estimated assets would be ETFs, up from less than 21% at the end of 2021.
The top areas for product development, by new funds that address environmental issues, are climate change (83%), pollution (60%) and clean water (60%), according to Cerulli. The top social issues covered by new funds are equal opportunity employment and diversity (37%), gender equality (37%), labor standards (33%) and housing (33%).
This story was originally published on ESG Clarity.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
