Exchange traded fund provider Lyxor ETF announced the release of its 2020 Money Monitor, tracking capital flows into European ETFs for the year. According to the new report, inflows into ESG ETFs more than doubled over the prior year, reaching €45.5 billion, and representing more than half of all inflows into all ETFs. Overall ETF inflows were strong in the year at €89.3 billion, the third largest on record, but below 2019 record inflows of €102.6 billion.
According to Lyxor ETF, the strong growth in ESG investment demand has led to a rapid expansion in ETF offerings, with 85 new ESG ETFs launched during the year, more than twice the number created in each of the past two years.
Vincent Denoiseux, Head of ETF Research and Solutions at Lyxor Asset Management, said:
“Investors’ appetite for ETFs did not wane during last year’s market turbulence with ETFs proving to be liquid and reliable ways to access markets, even when volatility was at its highest. The pandemic also highlighted the impressive growth in demand for ESG investments, with ESG ETFs continuing their evolution towards becoming new market standards having been perceived as niche products just a few years ago. Investors are increasingly aware of their effectiveness in shifting capital at scale towards a more sustainable economy. We expect this trend to continue in the coming years.”
December was another record month for ESG ETF inflows, according to Lyxor, gathering assets of €9.7 billion. By asset class, equity ESG ETFs gained €7.3 billion and fixed income ESG ETFs saw €2.5 billion of flows. Climate ETFs, a relatively new sub-category, also reached a new record in the month, claiming €2 billion of the inflows.