03/08/23

GREEN FINANCE: UK investors pull 1 billion pounds from ESG funds since May

As published on: reuters.com, Thursday 3 August, 2023.

Investors in Britain have pulled more than 1 billion pounds ($1.3 billion) from environmental and social-focused funds since May, as cash continues to flow into investments perceived as safe harbours such as bonds and money market funds.

Data from fund network Calastone shows funds focused on environmental, social and governance issues (ESG) saw a third consecutive month of outflows in July, with a record 376 million pounds withdrawn that month.

Overall, the data showed UK investors shunned stocks in July, withdrawing 983 million pounds from equity funds. Domestic equity funds suffered a 26th straight month of outflows, shedding 710 million pounds.

"For now, investors remain very risk averse, choosing the strong rally in global share prices as an opportunity to withdraw cash rather than bank on further gains," said Edward Glyn, head of global markets at Calastone.

Fixed income funds were once again a beneficiary of outflows from equities, with 347 million pounds of inflows in July - though this was down on June's 880 million pounds of inflows.

Rising interest rates added further to the attraction of money market funds, which saw 403 million pounds of inflows in July. Inflows to money market funds over the last six months have topped the previous four years combined, Calastone said.

Tags

Green Finance Sustainable Finance ESG