Funds Promoting Responsible Investing Tripled in S
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Posted On: 02/28/2024 5:13:55 PM
Funds Promoting Responsible Investing Tripled in Size from 2012 – 2022
A recent analysis by the CFA Institute has revealed that funds promoting responsible spending nearly tripled in size from 2012 to 2022. The analysis found that responsible investment funds increased from $2.2 trillion in 2012 to almost $6 trillion in 2022, suggesting a growth rate in line with the wider investment fund market.
Titled “Responsible Investment Funds Build Consistent Market Presence,” the report shows that responsible investment funds maintained a relatively consistent market share over the study period, experiencing a slight increase from 14.2% in 2012 to 15.4% a decade later. As such, the report posits that responsible investment funds seem to be growing in line with the general investment fund market rather than at the expense of funds that aren’t involved in promoting responsible investment.
CFA Institute senior head of research Rhodri Preece notes that complicated regulatory and political conditions for responsible investment funds are hindering institutional asset growth. Furthermore, Preece says, the environment could potentially prevent investment companies from investing in responsible investment firms further over the next several years. She concludes that younger investors will have a “growing influence on product developments” because their personal preferences and values increasingly affect their investment strategies.
The CFA Institute report tracked responsible investing patterns among both institutional and retail investors in the United States and Europe. Researchers found that American asset owners are more likely to consider ESG factors while crafting their investment strategies to enhance their investment risk/return profile. As a result, institutional investors in the U.S. hold a larger share of assets in responsible investment funds, likely because institutional investors often leverage ESG to increase their risk-adjusted returns.
On the other hand, European investors tend to consider ESG factors when creating their investment strategies for ethical reasons. The report also noted that European investment trends seem to be behind the global trend for funds that promote responsible investment, resulting in Europe-located responsible investment funds making up to 90% of total net assets by 2022.
Negative screening emerged as the most popular investment strategy for institutional and retail investors with almost 72% of all responsible investment funds leveraging some form of negative screening strategy. Furthermore, around 25% of all responsible investment assets held by institutions were in positive screening funds compared to 20% of retail investors. The report notes that this difference suggests institutional investors typically invest more of their responsible investment fund assets in positive screening funds compared to retail investors.
The steady growth registered by funds supporting responsible investing is a boon for enterprises such as First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) since it can be easier for these companies to attract investment from such funds and their backers.
NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
A recent analysis by the CFA Institute has revealed that funds promoting responsible spending nearly tripled in size from 2012 to 2022. The analysis found that responsible investment funds increased from $2.2 trillion in 2012 to almost $6 trillion in 2022, suggesting a growth rate in line with the wider investment fund market.
Titled “Responsible Investment Funds Build Consistent Market Presence,” the report shows that responsible investment funds maintained a relatively consistent market share over the study period, experiencing a slight increase from 14.2% in 2012 to 15.4% a decade later. As such, the report posits that responsible investment funds seem to be growing in line with the general investment fund market rather than at the expense of funds that aren’t involved in promoting responsible investment.
CFA Institute senior head of research Rhodri Preece notes that complicated regulatory and political conditions for responsible investment funds are hindering institutional asset growth. Furthermore, Preece says, the environment could potentially prevent investment companies from investing in responsible investment firms further over the next several years. She concludes that younger investors will have a “growing influence on product developments” because their personal preferences and values increasingly affect their investment strategies.
The CFA Institute report tracked responsible investing patterns among both institutional and retail investors in the United States and Europe. Researchers found that American asset owners are more likely to consider ESG factors while crafting their investment strategies to enhance their investment risk/return profile. As a result, institutional investors in the U.S. hold a larger share of assets in responsible investment funds, likely because institutional investors often leverage ESG to increase their risk-adjusted returns.
On the other hand, European investors tend to consider ESG factors when creating their investment strategies for ethical reasons. The report also noted that European investment trends seem to be behind the global trend for funds that promote responsible investment, resulting in Europe-located responsible investment funds making up to 90% of total net assets by 2022.
Negative screening emerged as the most popular investment strategy for institutional and retail investors with almost 72% of all responsible investment funds leveraging some form of negative screening strategy. Furthermore, around 25% of all responsible investment assets held by institutions were in positive screening funds compared to 20% of retail investors. The report notes that this difference suggests institutional investors typically invest more of their responsible investment fund assets in positive screening funds compared to retail investors.
The steady growth registered by funds supporting responsible investing is a boon for enterprises such as First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) since it can be easier for these companies to attract investment from such funds and their backers.
NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
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