[ad_1]
According to a recent Morningstar report, global sustainable funds recorded net outflows of USD 2.5 billion for the first time in the fourth quarter of 2023.
Net outflows in Q4 2023, according to Morningstar data, The investment was driven by investors from the United States, Japan and Canada, pulling in a total of US$6.5 billion from sustainable-labeled mutuals, open-end and exchange-traded funds.
Meanwhile, inflows into sustainable funds were mainly from investors in Europe and Australia/New Zealand, who invested US$3.3 billion and US$600 million, respectively. Finally, investors from Asia excluding Japan contributed an additional US$100 million.
This negative net flow reflects investor pessimism over prevailing macroeconomic and geopolitical challenges, hurting not only sustainable funds but also traditional mutual funds and exchange-traded funds. and experienced outflows of USD 17 billion over the same period. period.
Despite large redemptions, assets under management (AUM) of sustainable fund issues remain strong. Morningstar estimates that there were 121 new sustainable fund launches globally in the fourth quarter of 2023, up slightly from 114 in the previous quarter.
This takes sustainable funds under management to new heights, reaching nearly USD 3 trillion globally, representing 8.2% quarter-on-quarter growth. BlackRock, UBS and Amundi are the top three asset managers with total sustainable fund assets under management of USD 643.7 billion.
Divergent Asia
Within Asian markets, different attitudes regarding sustainable funds were observed. Japanese investors were less interested as Japan’s sustainable fund flows, which turned negative after the third quarter of 2022, showed no signs of recovering in the fourth quarter of 2023. Additionally, Japan’s sustainable funds showed a net outflow of USD 8.3 billion throughout 2023.
In contrast, Japan’s overall fund market pool moved in the opposite direction, increasing by USD 65 billion over the same period. Furthermore, the number of new sustainable fund launches in the Japanese market has been decreasing throughout the year, and there were no new launches in the fourth quarter of 2023.
However, in other markets in Asia, the sustainable funds market remains viable, with inflows increasing by USD 100 million in Q4 2023 and assets under management increasing by 5% QoQ to USD 61 billion. Masu. China-based sustainable funds had the highest amount of withdrawals at USD 1.3 billion, while funds based in Taiwan had the highest amount of inflows at USD 1.4 billion. The same trend was seen on the AUM front, with Taiwan’s asset size increasing by about 50% in 2023 and accounting for 22% of regional assets.
In terms of new launches, there were 29 sustainable funds participating in the region in Q4 2023, of which Thailand outperformed with 22 funds. The issuance activity is a result of tax incentives approved by Thailand’s Cabinet in November, under which investors who purchase Thailand-based sustainable funds can keep their investments for at least eight years. Eligible for tax deductions and exemptions if held.
As we move into 2024, the sustainable fund market remains optimistic. Another report from Morgan Stanley shows that 77% of retail investors worldwide are interested in investing in sustainable funds and companies that address environmental, social and governance issues. Climate action, healthcare and the circular economy are the top three themes investors are watching.
[ad_2]
Source link
