Asia Sustainable Assets Hit New Highs

But quarterly flows slowed with fewer new launches.

Kate Lin, CAIA 28 July, 2021 | 0:17
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Sustainable funds continue to amass assets across Asia in the second quarter of 2021. Total assets invested in Asia-domiciled funds reset theirs high of US$36.3 billion at the end of June, up 3.3% from the last quarter.

Recent quarterly flows, however, are down in comparison to year-over-year  growth, seeing assets double from US$15.8 billion.

 

As a whole, flows into sustainable funds significantly slowed in the second quarter of 2021. Excluding the mainland China market, the three-month period ended with a net fund inflow of US$741.1 million, down 70% from the last quarter. Only Hong Kong-domiciled funds could gather more assets in the second quarter than the first.

On a relative term, South Korea continues to see a relatively sizeable flow. The inflow was primarily sustained by six new launches between April and June, which represent almost half of the 13 new launches across the region. Another six new sustainable funds were launched in mainland China and the remaining are distributed to investors in Taiwan. Year-to-date, asset managers have launched 35 new ESG-focused funds , versus 43 launched throughout the calendar year of 2020.

 

For investors in Asia, equity and allocation funds remain popular tools to obtain ESG exposure . The market share of fixed income funds stands at 7%, and has been relatively stable over the past two years. In terms of style, while actively-managed funds have been mainstream for sustainable investment, interest in index funds with ESG overlay has been on the rise, absorbing 30% of the total flow since the beginning of the year.

 

 

Funds that were the most and the least popular in the quarter are listed by domicile:

 

 

 

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Kate Lin, CAIA

Kate Lin, CAIA  is a Data Journalist for Morningstar Asia, and is based in Hong Kong

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