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Laxman Pai, Opalesque Asia:

80% of global ESG equity products are outperforming over three years, but these products have struggled so far in 2022, said a study.

According to a research paper by Investment Metrics (IM), an investment analytics provider, global ESG equity products nearly doubled in assets from 2019 to 2021, and most outperformed until 2022.

Investment Metrics research suggests that 78% of global ESG equity products have struggled to beat the MSCI ACWI index since the start of the year.

"The median return for the Global ESG equity peer group was -15.6% for the second quarter of 2022, narrowly outperforming the MSCI ACWI index by 6 basis points. However, year-to-date (through June) the story is quite different with 78% of ESG equity products underperforming the benchmark. In fact, the median underperformed the benchmark by 2.5%," the report explained.

"Despite this, 80% of the products outperformed over a three-year time horizon - with a three-year median return of 8.54%, outperforming the benchmark by 2.3% and the broader IM Global Large Cap Equity Peer Group by 1.2%," it added.

The report by Brendan Cooper, senior research consultant, also found that 55% of global ESG products are based in Europe, excluding the U.K., and few of them have a value focus.

Investment Metrics studied 52 funds from 45 asset managers in a global ESG equity peer group created by screening the broad IM global equity peer group for products bran......................

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