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Alternative Market Briefing

Sustainable beta portfolios on the menu for global institutional investors

Monday, August 17, 2020

Laxman Pai, Opalesque Asia:

FTSE Russell 2020 survey finds 58% of asset owners globally anticipate applying sustainability considerations to smart beta strategies, up from 44% in 2019.

More than 7 in 10 asset owners globally are evaluating and implementing sustainable investment considerations in their investment strategies in 2020, said the survey.

Furthermore, among those using and/or evaluating smart beta strategies globally, 58% anticipate applying Sustainable Investment (SI) considerations to their smart beta strategy, up from 44% in 2019. Nearly half of respondents who anticipate applying these considerations to their smart beta strategies expect to increase their allocation to SI smart beta over the next year or two.

While evaluation and adoption of sustainability considerations grew for asset owners across the entire AUM spectrum, appetite was notably higher among larger asset owners. Eighty percent with AUM of USD10 billion or higher have evaluated or adopted sustainability considerations, compared to 54% in 2019.

In 2020, the rate of sustainable investment evaluation and adoption among asset owners in EMEA (85%) remains higher than that of North America (63%). Besides, EMEA still leads the way in applying sustainability considerations to smart beta: over 80% of EMEA asset owners evaluating or using smart beta expect to apply sustainability considerations to smart beta, up from 73% last year.

However, the regional differences highlighted in 201......................

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