European net flows into ESG ETFs have continued their strong performance in July, according to a report by Societe Generale’s asset management and ETF subsidiary Lyxor.
In the report outlining the firm’s analysis of flows in European open-ended funds and ETFs, Lyxor reported that ESG ETFs saw positive net flows of €3.7 billion, representing over a quarter of the total industry’s €3.7 billion net flows into ETFs overall. The report covers over 29,000 funds that have reported flows for the entire month of July 2020, representing 92% of all Europe domiciled funds and ETFs.
By asset class, ESG ETFs added almost €3 billion in equities, and slightly under €1 billion in fixed income. According to a recent Morgan Stanley report, 89% of global ESG ETF AUM is equity-focused, with 11% fixed income focused, although fixed income has recently seen faster growth rates than their equity ETF counterparts.
Throughout the current year’s market volatility, ESG ETFs have demonstrated very strong performance, both in terms of returns and net flows. Year-to-date, according to the report, European ESG ETFs have gathered net new assets of €18.0 billion, second only to the much larger asset class of fixed income at €20 billion. Net flows into ESG ETFs represent more than half of the ETF industry’s growth of €30 billion.
At this point last year, net flows into ESG ETFs had reached approximately €8 billion.