Responsible investment funds experienced strong inflows in the run-up to COP26, according to new data from Investment Association (IA).
Savers invested £1.6bn into responsible investment funds in September. As of the end of September, there were £85 billion in responsible investment funds under management. Their overall share of funds under management in the industry was 5.5 per cent.
Global was the best-selling IA sector in September 2021, with net retail sales of £955m, followed by short term money market (£502m), volatility managed (£398m), sterling strategic bond (£236m), and mixed bond (£199m). In September 2021, the worst-selling IA sector was UK All Companies, which saw outflows of £341m.
Tracker fund sales remained strong, with £1bn in inflows. Inflows into property funds totalled £90m, nearly four times the £23m received in August, and for the second month in a row, UK equity funds saw outflows of £584m.
Investment Association chief executive Chris Cummings says: “It is encouraging to see investors’ continuing commitment to sustainability in the run-up to the crucial COP26 negotiations. This is reflected in the strong inflows into responsible investment funds in September, which accounted for two-thirds of the total funds.
“The FTSE’s performance has been solid in recent months, and the rebound in UK companies paying dividends continues, but investor appetite for UK equities has weakened for the second consecutive month. Uncertainty remains over the pace of economic recovery into 2022, and the outlook for inflation as supply chain and labour challenges continue to bite in the run-up to Christmas.”
Hargreaves Lansdown head of investment analysis and research Emma Wall says: “Looking for evidence of real action on climate? Retail investors are showing the politicians at COP how to align ethics and profits – investing record cash into responsible funds. We’ve seen flows on platform up 6,000 per cent in the past five years, and there’s no sign of appetite slowing. The pledges made this week by both the regulator and financial services industry to support the transition to a greener, cleaner economy creates both the chance of a brighter future for the environment and society – as well as a multitude of exciting investment opportunities.”