ESG Research Update

PFL reports on the Australian and New Zealand responsible investments market

There has been 7.8 per cent annual growth in responsible investment funds, which is outpacing the broader market. The responsible investment managed funds market across Australia and New Zealand (including RIAA certified and non-certified responsible investments) accounted for over $65 billion in funds under management in 2020, an increase of 7.8 per cent over the past year.

This growth has outpaced the wider market by 3.8 per cent consistently across the past three years, with responsible funds seeing negative quarterly net flows just twice since 2015. The wider investment market fell 1.6 per cent over the year, while responsible funds, including retail and wholesale unit trusts, still rose 7.2 per cent. The Australian super responsible sub-market fell 2.4 per cent across the last year, but saw a 5-year compound annual growth rate of 8.9 per cent and holds over 14 per cent of overall responsible investment funds under management.

Exchange-traded funds (ETFs) are showing slower adoption of responsible investment focus, but are still growing rapidly in funds under management and products. There are now 13 products in the current total and funds under management rising 54 per ent across the past year.

New Zealand responsible funds now make up $10.2 billion in funds under management, over 14 per cent of the total New Zealand retail market. This market has posted significant growth despite falling investment markets.

For the full report, contact Plan For Life.