Interactive Investor

Investors are piling into responsible investment funds

5th November 2021 13:37

Tom Bailey from interactive investor

Loading

Share on

So-called responsible investment funds now have £85 billion under management, representing 5.5% of all fund assets.

Responsible investment funds made up two-thirds of fund inflows in September this year, according to the latest statistics from the Investment Association (IA).

In total, investors put £1.6 billion into funds classed as responsible by the IA, representing the second-highest month of inflows since March. Responsible investment funds now have £85 billion under management, representing 5.5% of all fund assets. 

In total, £2.3 billion flowed into funds in September. The best-selling sector was Global, which saw £955 million invested. There was also a pick-up of money going into property funds. The sector had inflows of £90 million, almost four times those seen in August.

The worst-selling sector in September was UK All Companies, which saw outflows of £341 million. UK equity funds combined saw £584 million withdrawn, representing its second consecutive month of outflows.

Asia funds also experienced outflows, losing £140 million. Investors also exited Japanese funds, with the sector losing £62 million.

Tracker funds saw strong inflows, taking in £1 billion. Tracker funds had £285 billion under management, as of the end of September. The overall share of fund assets under passive management now stands 18.4%.

Chris Cummings, chief executive of the IA, said: “It is encouraging to see investors’ continuing commitment to sustainability in the run-up to the crucial COP26 negotiations. This is reflected in the strong inflows into responsible investment funds in September, which accounted for two-thirds of the total funds.

“The FTSE’s performance has been solid in recent months and the rebound in UK companies paying dividends continues, but investor appetite for UK equities has weakened for the second consecutive month. Uncertainty remains over the pace of economic recovery into 2022 and the outlook for inflation as supply chain and labour challenges continue to bite in the run up to Christmas.”

The IA defines responsible funds as those pursuing one or more of the following responsible investment approaches: exclusions, sustainability focus and impact investing.

Disclosure

We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.

Please note that our article on this investment should not be considered to be a regular publication.

Details of all recommendations issued by ii during the previous 12-month period can be found here.

ii adheres to a strict code of conduct.  Contributors may hold shares or have other interests in companies included in these portfolios, which could create a conflict of interests. Contributors intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. ii will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, individuals involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles.

Get more news and expert articles direct to your inbox

Sign up for a free research account to get the latest news and discussion, and create your own virtual portfolio.

Free Sign Up