Ethical ETFs end 2022 with $9.2bn in FUM

Oksana Patron

30 January 2023

The ethical, responsible and sustainability themed exchange traded funds (ETFs) held $9.2 billion in funds under management (FUM) across 52 funds at the end of 2022 as investors and financial planners aligned portfolios with values.

By comparison, at the start of 2022, this category held $7.5b across 30 funds.

According to Betashares, a growing number of investors placing more of their portfolio in ethical, responsible and sustainability themed ETFs helped propel the  increase in FUM despite market volatility .

In the last year alone, the Australian market saw an addition of 22 ETFs launched in this category, with new funds offering exposures to themes such as solar, electric vehicles, energy transition metals and the future of food.

Greg Liddell, Betashares’ responsible investments director, said that other trend  from 2022 included an increase in stewardship activities by fund managers like Betashares, best reflected by the shareholder led refresh of the AGL board.

“It’s clear that the future of responsible investing will increasingly be about the ability to link investment and stewardship activity with positive outcomes,” he said.

“Climate change transition, biodiversity, diversity, and the empowerment of women are all topics of concern to a greater number of investors and will result in more impact and sustainability themed products in these areas.

“Stewardship is of increasing value, particularly for index investors, as more stakeholders are focussed on achieving results from their stewardship program, rather than simply citing the importance of engagement.”

Betashares had 12 funds in this category holding $4.2b in funds under management.