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Laxman Pai, Opalesque Asia: Responsible investment allocations by UK wealth managers and private banks are increasingly turning away from active environmental, social, and governance (ESG) strategies in favor of passive ones, research by Cerulli Associates has found.
According to Cerulli Associates' latest Cerulli Edge - European Edition report, responsible investment allocation has been evolving and expanding towards fixed income and passive strategies.
The report said that Almost 44% of UK wealth managers and private banks expect demand for index funds and exchange-traded funds (ETFs) to increase over the next 12 to 24 months.
Furthermore, 80% of asset managers in the UK also expect ETFs and 60% expect index mutual funds to experience moderate or fast growth of their assets over the next one to two years.
Wealth managers and private banks' demand for passive ESG strategies is currently higher than their demand for active ESG strategies: 29% in the UK see a high demand for index ESG funds and 10% see a high demand for active ESG funds.
Meanwhile, it is still the case that the bulk of ESG funds in the UK are equity funds. Yet having a higher number of options in fixed-income and multi-asset strategies has made life easier for local fund selectors. The availability of ESG ETFs generally has improved significantly in the UK: just 27 were listed on the London Stock Exchange (LSE) at the end of 2018, compared to 194 as of March 2023.1 In 2022, LSE-listed...................... To view our full article Click here
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