Rising fee income from ESG funds was a bright spot in an otherwise bleak year for asset managers.
Asset managers saw fee income from sustainable bond and equity funds multiply in 2022, with the former generating the largest revenue increase in percentage terms, and fee income swelling 384 percent to $215 million, according to a Fitz Partners estimate for «Financial News» (behind paywall).
That was accompanied by a 343 percent increase in the average assets under management of sustainable bond funds, the report adds. The high fees that ESG bond funds generated are in stark contrast to non-ESG fixed-income products. Traditional bond funds brought in $3.3 billion last year, down nearly 6 percent from 2021, according to the survey which analyzed over 3,500 European funds, excluding ETFs.
Market Carnage
ESG equity funds also brought asset managers strong returns in 2022 with a 291 percent increase to $1.3 billion. Meanwhile, traditional equity funds saw a more modest 33 percent increase in returns to $7.2 billion. Average assets under management in these funds increased by about a third.
«Amid the generalized market carnage in 2022, ESG funds suffered far less and continued to attract new inflows that targeted the bargains thrown up by choppy markets», Amin Rajan CEO of Create Research is quoted as saying. «The bear market has burnished the credentials of ESG investing, rather than dented them, as critics had expected.»
