News

Survey shows waning interest in ESG funds

Survey shows waning interest in ESG fundsInvestors across Asia have become more sceptical about the credibility and performance of ESG funds, according to recently released research. The survey commissioned by AXA Investment Managers showed that investors’ doubt about the performance of ESG funds has increased and is now the main barrier to allocating assets to these funds. More than a third (35%) expressed doubt in 2023, compared to 27% in 2021.  Similarly, the number of investors who expected ESG funds to outperform funds with the same level of risk fell by 10 percentage points to 41% in 2023. “There is a lack of clarity over ESG funds being genuinely more sustainable,” stated the report. “Across Asia, investor awareness and understanding of their ESG product holdings are on the decline.” In Singapore, the number of investors holding ESG funds has decreased over the same period, from 38% in 2021 to 36% in 2023. Furthermore, those investors are also allocating a smaller proportion of their portfolio to sustainable funds. Just over a quarter (28%) of investors are allocating more than 40% of their portfolio to ESG funds, compared to 37% in 2021. According to AXA IM, investors need to be made more aware of the intentions of ESG funds in order to breed more confidence in the asset class. “Strengthening trust and confidence in ESG assets will prove challenging unless investors acquire a deeper comprehension of the diverse ESG products and solutions, their specific goals, and an understanding of the underlying mechanisms,” said Jane Wadia, head of sustainability at AXA IM. The survey was carried out by research firm Cicero in October 2023 and interviewed 12,000 consumers across Asia and Europe. © 2024 funds global asia

Industry comments

Investing in tomorrow’s world

investmentAt times like these, HSBC Asset Management easily pivots towards emerging markets.

The spotlight on growth markets and the need to be nimble and dynamic is ever-sharper, given the difficulty in predicting monetary policy in the world’s major nations.

Sponsored feature: Navigating the complexities of FX execution and currency risk

A comprehensive, cost-effective, and transparent currency overlay hedging solution is crucial to mitigate FX exposure risks in the complex landscapes of Japan and China's FX markets, explains Hans Jacob Feder, PhD, global head of FX services at MUFG Investor Services.

Opinion

The emergence of AI-powered funds

Contradictory market sentiments from commentators have impeded the decision-making powers of the first wave of AI-powered ETFs, says Alvin Chia of Northern Trust Asset Servicing.

Transitioning to an era of scarcity

The world is transitioning from an era of commodity abundance to one of undersupply. Ben Ross and Tyler Rosenlicht of Cohen & Steers believe this shift may result in significant returns for commodities and resource producers over the next decade.

Asia credit: An outsized winner in the region’s energy transition?

Ross Dilkes, fixed income portfolio manager at Wellington Management, examines the opportunities and risks for bond investors presented by the region’s decarbonisation agenda.

A quiet revolution in Japan’s corporate governance

revolution, Japan, corporate governance, Shareholders, corporate, governance, standards, improvement, Tetsuro Takase, SuMi TrustShareholders in Japan no longer accept below-par corporate governance standards. Changes are taking place, but there are still areas for improvement, says Tetsuro Takase at SuMi Trust.

Executive Interviews

Executive interview: PGIM CEO on where the ESG flowers should bloom

Sep 27, 2021

David Hunt, president and chief executive of PGIM, tells Romil Patel about leading a top 10 global asset manager in times where “empowering and encouraging the kind of investment decisions as...

Executive interview: Nicolas Moreau’s orderly transition

Jul 12, 2021

Nicolas Moreau, CEO of HSBC Asset Management, is moving to Asia as the firm looks to connect more directly with the region’s growth story. ESG is also a key focus – including the ‘just’ carbon...

Roundtables

India: An “obvious choice for global investors”

Jun 22, 2023

Funds Europe, the sister publication of Funds Global Asia, hosted an India investment discussion with two seasoned experts and asked if India is the ‘last one standing’ from the Brics phenomenon. We also hear that for India, the inclusion of Indian bonds in a major index may not be the desired...

Roundtable: Singapore comes of age as an Asian ESG hub

Dec 01, 2021

Strong ESG credentials strengthen the case for Singapore as a leader in Asia of the post-Covid recovery. Our panel discusses the risks and opportunities.