NEW YORK, Sept. 30, 2020 /PRNewswire/ -- A new report from
Broadridge Financial Solutions, Inc. (NYSE: BR), a global Fintech
leader, reveals a growing investor demand for active managers to
introduce new environmental, social and governance (ESG) funds to
the market. In the U.S., net flows to long-term responsible funds
quadrupled in 2019 to $20 billion,
from $5 billion in 2018, and
continued to grow during the first half of 2020 to reach
$21 billion. A majority (68%) of ESG
assets in the U.S. are now in actively managed funds.
Changes in the makeup of the ESG market over the last five years
have important implications for asset manager strategies. Since
2015, best-in-class/positive screening, sustainability/thematic and
integration/engagement funds have all increased their share within
the market. In the same time period, exclusions-based funds have
dropped from 36% to 7% of the market. Impact investing funds have
remained consistent, at 10% share in 2015 and 8% share in 2020.
Similar shifts are occurring within the U.S. market.
"From both a supply and demand perspective, we have witnessed a
shift toward achieving positive environmental and social outcomes
alongside competitive investment returns," said Jag Alexeyev,
Director Distribution Insights at Broadridge Financial Solutions.
"Active managers are in the driver's seat when it comes to ESG, but
in order to maintain their edge in this segment, they need to
highlight their agility to proactively manage risks, leverage
active ownership, pursue dynamic high-conviction strategies and
deliver sustainable outcomes."
ESG Strategies Outpace Non-ESG Peers in Competition for
Active Equity Flows
ESG strategies represent an attractive segment for active
managers, especially in equity strategies. Flows into ESG active
equity funds during the trailing 12 months reached 15% of average
assets in Europe and International
cross-border markets, and 10% in the U.S.
Financial Advisors Seeking ESG Support to Fill Investor
Demand
According to a separate survey from Broadridge of over 400
financial advisors, 81% of wirehouse advisors have assets in ESG
products today, followed by the IBD (68%) and RIA (60%) channels.
As a result of the COVID-19 pandemic, almost a quarter of financial
advisors (24%) reported that they saw an increase in client
interest in ESG.
Generational divides were present in the study findings, with
69% of advisors under the age of 35 using ESG mutual funds and ETFs
today – a number expected to jump to 83% in two years. Meanwhile,
just over half (56%) of advisors over the age of 55 use ESG mutual
funds and ETFs today. Older advisors appear to recognize the appeal
and demand for ESG products, as 74% of that group expect to use ESG
mutual funds or ETFs in two years.
Methodology
This report was conducted using Broadridge's Global Market
Intelligence platform. Broadridge's proprietary Global Market
Intelligence platform provides an integrated analytics solution for
the asset management market tracking institutional and retail
products globally. Broadridge provides insights into $76 trillion of tracked assets, covering every
market in every region, and 80,000 globally tracked funds.
The Broadridge survey was conducted by 8 Acre Perspective Corp.
and is the latest in a series of financial advisor surveys that
reveal how advisors are adapting and changing their business models
in response to market volatility and the pandemic. A total of
401 U.S. financial advisors across wire, regional, IBD and RIA
channels completed the survey, which was fielded from July to
August 2020.
For further details on survey methodology, please contact a
Broadridge media representative.
About Broadridge
Broadridge Financial Solutions, Inc. (NYSE: BR), a $4 billion global Fintech leader, is a leading
provider of investor communications and technology-driven solutions
to banks, broker-dealers, asset and wealth managers and corporate
issuers. Broadridge's infrastructure underpins proxy voting
services for over 50 percent of public companies and mutual funds
globally, and processes on average more than U.S. $8 trillion in fixed income and equity securities
trades per day. Broadridge is part of the S&P 500® Index and
employs over 12,000 associates in 17 countries.
For more information about Broadridge, please visit
www.broadridge.com
Media Contacts:
Matthew Luongo
Prosek Partners
+1 646.818.9279
mluongo@prosek.com
Linda Namias
Broadridge Financial Solutions
+1 631-254-7711
Linda.Namias@broadridge.com
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SOURCE Broadridge Financial Solutions, Inc.