Article 9 ESG funds were inflow-winners in September, in an otherwise negative month for fund flows.
Funds categorised as Article 9 – the highest level of ESG criteria under EU rules – attracted €529 million in net inflows, according to Morningstar.
Net flows to all European-domiciled long-term funds were in negative territory, with 13.4 billion of redemptions, which followed prior outflows in August of €6.6 billion.
Morningstar said this reflected negative investor sentiment caused by economic uncertainty and inflation that has been more resilient than expected.
Global stocks declined by 4.1% in U.S. dollar terms during September, and global government bonds also fell by 1.6% “as the optimism that rates will revert to under 3% sooner rather than later seemingly dissipated last month”, according to Valerio Baselli, senior international editor in the firm’s latest flow report.
Equity strategies experienced had €5.2 billion of net redemptions – though passive equity funds had €5.7 billion of net inflows in the month, with Vanguard overtaking BlackRock’s ETF brand, iShares, as the main asset gatherer – and bond funds had their 11th positive month in terms of flows, bringing in €4.3 billion.
Article 8 funds, which have a lower set of ESG criteria compared to Article 9 – shed €9.4 billion in September.
Article 9 products had the highest organic growth rate for the third quarter at 0.26%, while the former had a negative 0.44% organic growth rate in the same period.
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