SRI mutual funds across Europe continue to grow, both in terms of numbers and assets under management, according to corporate social responsibility ratings agency Vigeo Italia.
SRI retail funds grew by 13% to 437 European domiciled funds in the year to end-June 2007, while total assets under management jumped 43% to more than €48.7bn, benefiting from positive returns in the financial markets as well as from growth in new funds.
A wide range of fund styles has evolved and become available over the past three years, including new positive and negative criteria such as Sharia screens, specialisations such as climate change and new regional coverage as in Asia-Pacific and Latin America says, Vigeo Italia in its Green Social and Ethical Funds in Europe - 2007 Review.
While equity and balanced funds still make up more than 80% of European SRI fund assets, coverage of fixed income issues has increased on supranational, sovereign, sub-sovereign and corporate levels, despite a 2% dip from 2006 to 2007. Innovative investment and marketing policies, such as protected capital, have also been launched.
Simonetta Bono, responsible for SRI business development at Vigeo Italia, attributes the growth to a greater awareness, increased communication and disclosure about corporate social responsibility and best practice, as well as the increasing importance of corporate governance.
"But although the growth of assets in SRI mutual funds is encouraging and in some cases, such as Switzerland and Belgium, the year-on-year growth rate has been remarkable at 100% and 77%, SRI funds will remain a niche, albeit a growing one," says Bono.
Currently their assets make up only 0.75% of total UCITS assets under management, with the average asset mean amounting to €112m per fund. France, the UK, Sweden and Belgium account for more than 65% of available European SRI funds.