All roads (or most) lead to ESG during economic downturn

 

Exchange-traded funds (ETF) focused on companies with leading environment, social and governance (ESG) performance not only survive during economic downturn, they thrive.

​​​​​​​This article is by BloombergNEF analyst Kyle Harrison. It first appeared on the Bloomberg Terminal.

ESG-focused ETFs saw net inflows of investment nearing $3.4 billion in May, despite the Covid-19 pandemic and ensuing economic disruption. Though net inflows in May were down from $5.1 billion in April, they still exceed any month prior to 2020. Investment into these funds shows that investors prefer to put their money behind ESG funds and ride out market uncertainty during economic disruption, rather than withdrawing their investments, according to Bloomberg Intelligence.

• Net inflows for ESG ETFs approached $3.4 billion in May
• 79% of funds saw inflows; MSCI USA led with $558 million

Some 79% of ESG funds saw net inflows during May, up from 77% in April. The iShares ESG MSCI USA ETF saw net inflows of $558 million, leading the pack among ESG ETFs. Key portfolio companies in the MSCI USA ETF include tech companies like Apple and Microsoft, but also oil and gas companies with sustainability goals, like Exxon Mobil and ConocoPhillips.

ESG ETF net flows, by month