NEW YORK (Reuters) – U.S. investors poured $4.7 billion into so-called socially responsible mutual funds and exchange-traded funds in 2017, the category’s second-biggest annual inflow ever, with managers pointing to Trump administration policies as a reason for the move.
The industry remains relatively small, with an estimated $2.6 trillion in funds that screen investments based on companies’ social and environmental impact, compared with $16.3 trillion in all funds, according to the Investment Company Institute trade group.
Fund - Managers - Advisors - Interest - Investing
Fund managers and advisors said interest in socially conscious investing was boosted by President Donald Trump in June announcing his intention to pull out of the Paris Climate Accord, arguing it would undermine the U.S. economy.
“Trump saying he would withdraw the U.S. from the Paris Accord was the biggest single driver and served as a call to arms for pension funds and other investors to step up,” said William Vaughn, a research analyst at Philadelphia-based Brandywine Global, which manages approximately $74 billion in assets.
Inflows - Funds - Market - Part - Investor
Inflows into socially screened funds typically do not track those of the broader market, due in part to a smaller investor base that tends to keep their money invested regardless of year-by-year performance.
Indeed, inflows into such funds and ETFs grew by 22 percent in 2017, compared with a 232 percent increase into mutual funds and ETFs overall.
Inflows - Funds - Percent - Jump - Investors
But the 2017 inflows into socially screened funds marked a 340 percent jump from 2013, when investors directed just $1 billion into the category, according to Lipper data. By comparison, inflows into all funds grew 154 percent from 2013.
Joe Sinha, the head of sales and marketing at San Francisco-based Parnassus Investments, said inflows were roughly split between retail investors and institutions such as university endowment funds and religious organizations over the...
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