Asset management roundup: Survey predicts ESG-related ETF boom
More than four-fifths of professional investors expect investment into environmental, social and corporate governance (ESG) related exchange-traded funds (ETFs) to grow over the next five years, research from State Street Global Advisors (SSGA) has found.
More than one-fifth of the 45 institutional investors and wealth managers canvassed said they expected a “dramatic rise” in interest.
“Interest in ESG investing from index and ETF providers alike has been a large focus area for some time now,” said Claire Perryman, head of ETFs at SSGA in the UK.
However, she added that, by contrast, “the voice of the client in the ESG ETF debate has been quite muted”.
“We know that clients prioritise ESG criteria differently and that standardised methodology for ESG scoring is currently lacking,” Perryman said.
According to figures from the London Stock Exchange, May proved a record month for new entrants into the ESG area of the ETF market, with eight new launches bringing the overall total to 31.
Assets under management within ESG ETFs at the end of May stood at just under £4bn (€4.5bn).
Old Mutual splits asset management business
Quilter, the UK wealth manager, has finalised the £583m sale of its single strategy asset management business to the management team and funds managed by TA Associates, the private equity firm.
The deal, announced in December last year, follows the separation of Quilter’s single strategy business from its multi-asset division.
Quilter, formerly known as Old Mutual Wealth, listed on the London Stock Exchange on Monday. Its multi-asset division will now be known as Quilter Investors.
At 31 March 2018, Quilter oversaw £111.6bn in customer investments.
HFR adds smart beta benchmarks for multiple asset classes
Hedge Fund Research (HFR) has launched a range of 40 risk premia indices to meet growing institutional investor demand for greater transparency and liquidity.
The HFR Bank Systematic Risk Premia indices will offer daily performance reporting across a range of assets and strategies, the company said.
Assets covered by the indices include commodities, credit, currencies and equities, while also covering various investment styles such as momentum and value.
“Investors in these strategies have been asking for indices they can use for performance attribution, factor analysis, and investment purposes,” said Jerome Abernathy, head of the systematic risk premia project at HFR.
“This family of indices gives investors the tools they need, plus the ability to invest in alternative betas in a liquid, transparent fashion so they can focus on managers who truly generate alpha.”
Institutional investor demand globally for indices of risk premia strategies has exploded in recent years, Abernathy added.
HFR reported that more than $700bn (€600bn) in notional capital was invested in risk premia strategies across more than 1,200 products.