Covid-19 will accelerate the adoption of environmental, social and governance (ESG) principles-based investments, Singapore-based fund managers said in a survey.
Some 66 percent of respondents shared this view, with 76 percent saying that equities will attract the most flows, followed by multi-asset (12 percent) and alternatives (8 percent), according to the «Special Mid-Year Investment Managers’ Outlook Survey 2020» conducted by the Investment Management Association of Singapore (IMAS).
IMAS' survey in January ranked ESG adoption (68 percent) as the industry's leading future driver of investment growth in the next three years. Respondents also ranked ESG or impact-focused strategies (57 percent) as the top strategy that will grow in popularity in 2020.
«The latest survey results put to bed that the adoption of ESG investments was a bull-market phenomenon,» Rajeev De Mello, Chair of the IMAS Development Committee, said.
Pandemic Prompts Shift
The survey was conducted in June 2020 in light of the Covid-19 pandemic, and sought the views of 50 respondents – mostly CEOs and CIOs of fund management companies based in Singapore – on the near-term outlook and broader trends in the investment management industry.
Among other findings, the survey revealed that fund managers viewed technology adoption as crucial to managing challenges, with 68 percent saying they would increase adoption of technology to create flexibility to cope with future health crises. Half of the respondents said they will offer most employees the option to work from home when they want, even when telecommuting is no longer mandated or prescribed by the government.
The top strategy to grow in popularity in the next year was active equity (19 percent), and 42 percent of respondents said they expect demand for passive instruments/ETFs to accelerate in the next decade.
