Sustainable or ESG (environmental, social, and governance) funds in Asia (excluding Japan) witnessed an inflow of over $900 million during the quarter under review, according to the report by Morningstar.
Such funds offer exposure to themes such as renewable energy, low carbon, green transport and environmental protection.
In India too, sustainable funds, have shown resilience during the coronavirus-triggered market selloff and attracted more than $500 million (over Rs 3,700 crore) in January-March largely due to growing investor interest in environmental, social and governance issues, says the report.
The inflows in the first quarter of calendar year 2020 speak of the stickiness of ESG investments. Investors in sustainable funds are typically driven by their values, invest for the long term, and seem to be more willing to ride out periods of bad performance, it added.
During the quarter, Axis ESG Equity made its debut in India with $240 million seed capital and the fund assets under management (AUM) was pegged at Rs 1,554 crore.
Apart from Axis MF, Quantum MF and SBI MF too have ESG funds. At the end of the March quarter, AUM of SBI Magnum Equity ESG stood at Rs 2,039 crore and that of Quantum India ESG Equity was over Rs 12 crore.
Bucking the overall trend, the report said sustainable fund assets in Asia were up 21 per cent to $7.7 billion, bolstered by new fund launches.
Reference- Economic Times, Morningstar Report, Business Today