SNAPSHOT SUSTAINABILITY



Assets under management of sustainable funds rise to EUR 129 bn



The impressive growth of sustainable funds gained further momentum in the third quarter of 2020. At the end of September, assets under management of open-ended sustainable products stood at EUR 129 billion. Since the end of June, this corresponds to an increase of 27 per cent (conventional funds: two per cent), and to as much as 44 per cent compared to the end of March.

Net assets of sustainable open-ended funds

in EUR billion
  • 101
    52
    49
    31/3/2019
  • 106
    54
    52
    30/6/2019
  • 111
    55
    5‍6
    30/9/2019
  • 114
    54
    60
    31/12/2019
  • 90
    48
    41
    31/3/2020
  • 102
    52‍
    50
    30/6/2020
  • 129
    54‍
    75
    30/9/2020
  • Spezialfonds
  • Retail funds
This trend – accompanied intensively by BVI since the publication of the ‘Guidelines for Responsible Investing’ in 2012 – has allowed sustainable funds to grow by over EUR 100 billion within a few years. By comparison, the entire German fund market needed about 40 years from its origins in 1950 to reach a comparable size. Growth is particularly strong for retail funds: at the end of September, they managed EUR 75 billion according to sustainable criteria for their investors. This is an increase of 50 percent compared to the end of June. The assets under management of sustainable Spezialfonds grew by EUR 2 billion to EUR 54 billion. This means that retail funds account for almost 60 per cent of the sustainable funds market in Germany today.

Net sales of sustainable open-ended funds

in EUR billion
  • -0.3
    -0.4
    Q1 2019
  • 0.2
    2.4
    Q2 2019
  • 3.2
    0.1
    Q3 2019
  • 2.9
    -1.1
    Q4 2019
  • 3.5
    -1.0
    Q1 2020
  • 0.6
    4.1
    Q2 2020
  • 5.1
    -1.3
    Q3 2020
  • Spezialfonds
  • Retail funds
Although part of their asset growth in the third quarter stems from additional registrations, which are not reflected in net sales, new business also developed dynamically: within three months, investors bought shares of sustainable retail funds worth EUR 5.1 billion. This perpetuates a remarkable development: Since the beginning of 2019, net inflows have grown steadily. Even in the first quarter of 2020 – at the height of the Corona crisis – they amounted to EUR 3.5 billion. This compares with net outflows of EUR 14.6 billion from conventional retail funds in the same period. Sustainable Spezialfonds have not recorded net inflows since the beginning of 2019.

The figures on new business underscore a fundamental change: a few years ago, most new investments in sustainable funds came from institutional clients, especially churches, insurance companies and pension funds. Some of these have been investing their money according to sustainable criteria for decades. In contrast, many private investors have only begun to do so in recent years.

Among the preferred asset classes for retail funds, equity and bond funds each account for 33 percent of total fund assets, followed by balanced funds with 25 percent. Other asset classes play a smaller role, which is probably due to the still limited range of products (e.g. open-ended real estate funds) – and indicates potential for further growth.

Net assets of sustainable open-ended retail funds by asset class

as of 30 September 2020

33%

33%

9%

25%

100% =
EUR 75 bn
  • Bond funds
  • Balanced funds
  • Equity funds
  • Other
Combined Shape Created with Sketch.