With political pressure against environmental, social and governance (ESG) investments, retail investors have not given up on sustainable exchange-traded funds, even as major companies scale down their ESG plans.
Investors have raised $17.9 billion from ESG funds over the past two years due to the increase in political opposition. Nevertheless, according to the latest Cerulli Edge (American Assets and Wealth Management Edition), certain ESG-centric ETFs attract new funds and bring competitive returns, highlighting the attitude of institutional and individual investors towards sustainable investment. the growing gap.
This continued retail benefit is evident in the streaming data of major ESG ETFs. this Ishares ESG Aware Msci USA ETF (ESGU)One of the largest funds in the category, with assets of nearly $14.2 billion, has reached $588.7 million in the new currency year so far, according to ETF.com. The batch was conducted in the January 17 transaction.
Source: ETF.com
"There are still a large number of investors who take value in the ESG screen, especially those centered on environmental and living wage issues, even if they might otherwise be uninterested in becoming ESG investors." ”
When a company exits a series of ESG programs, an institutional retreat occurs. Major banks including Morgan Stanley (MS) and Goldman Sachs Group Corporation (GS) recently pulled from the United Nations zero-bank alliance, while companies such as Walmart (WMT) have reduced diversity amid criticism from Conservative politicians plan.
However, according to Cerulli's research, 67% of individual investors still tend to invest in companies that pay fair wages, while 49% prefer environmental leaders. Among investors under the age of 40, they are becoming richer and more likely to seek financial advice, with 66% preferring ESG-perceived investments.
Ongoing retail support matches the competitive performance of major ESG funds. Esgu has risen 22.3% over the past year, while Vanguard ESG US Stock ETF (ESGV) According to ETF.com data, 23.5% is returned. ESGV attracted $167.8 million in new assets this year, growing to more than $10.5 billion since its launch in 2018.
Even updated, more targeted ESG products are finding selective interest. This $15.9 million BNY Mellon Women’s Opportunity ETF (BKWO)ETF.com data shows that the launch in May 2023 focuses on gender diversity, has received $11.8 million in cash and has acquired a 17.4% stake since its inception.
Although ESG strategies face continued headwinds from conservative state legislatures that restrict sustainable investment, Cerulli's research shows that the retail market remains fertile. The company found that among ESG skeptics, 35% said they would consider sustainable investments encouraged by financial advisers.
“The difference now is that more review of the funds involved must be done to ensure that they are advertised as part of the standard risk reward assessment consultant will usually provide the clients,” the report notes.
Permanent link | © Copyright 2025 ETF.com. all rights reserved