Retail investors are turned off by vigilant ESG funds, research shows
Retail investors are falling out of love with woke ESG funds because they are underperforming, a study shows.
A poll among 276 financial advisors from investment firm Schroders shows that customer interest in ‘sustainable investment solutions’ is declining.
It found that only 17 percent of advisors had seen a small increase in demand for such products in recent months, down from 60 percent in November 2021.
James Rainbow, head of UK at Schroders, said: ‘You’re definitely seeing people pulling back from asking questions about sustainability from an investment context.’
ESG investing focuses on companies that meet ethical objectives, but has been criticized for box-ticking and accusations of greenwashing.
Falling in love: Survey of 276 financial advisors shows client interest in ‘sustainable investment solutions’ declining
Rainbow said investors had also noticed that ESG investing was not doing so well.
“I think, strictly from an investment performance perspective, people have seen some pretty challenging returns – especially when we went through an energy crisis,” he added.
The findings were part of the Schroders UK Financial Adviser Pulse Survey.