ESG funds were major beneficiaries of Australians’ cash in 2021, according to the latest special edition of our Fund Flow Index. The net new capital invested in ESG equity funds more than quadrupled year-on-year (+338%) to A$3.0bn. As recently as 2019, ESG funds in Australia were still seeing capital drain out.
Key highlights from this edition of the FFI:
- New capital flowing into ESG equity funds in Australia quadrupled in 2021, to A$3.0 bn. Flows surged in Q3 2021.
- Despite the boom, Australia still lags other markets when it comes to ESG equity investing.
- Local investors allocated $2 in every $10 to ESG equity funds in 2021, compared to $8 in every $10 in the UK.
- Australia leads in terms of allocating to ESG led fixed income funds, directing $4 in every $10 to fixed income funds with ESG strategies.