Inflows to Australian sustainable investments hit record highs

A new report from Morningstar said retail assets invested in sustainable funds topped a record $33.4 billion, with an estimated $2.9 billion flows in the last quarter alone; the highest quarterly flows on record.

The figure is an 18 per cent increase when compared with 31 March 2021 and a 66 per cent increase from 30 June 2020.

Over the last 12 months to 30 June 2021, inflows weighed heavily towards active funds (66 per cent) against passive strategies (34 per cent).

Five fund houses dominated the space, with Pendal and Vanguard coming out on top, ahead of Australian Ethical, BetaShares and Dimensional.

Morningstar further noted 135 Australian and New Zealand sustainable investments, 102 of which exclude investments in areas such as tobacco (100) and controversial weapons (95).

Compared with Europe and the US, the sustainable fund market in Australia remains "relatively small" with only three funds launched in Australia in total this year so far.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.