FE Investments sees 125 per cent increase in ESG-related AUM
FE Investments, the investment arm of global fund data company FE fundinfo, has seen a record 125 per cent increase in assets under management (AUM) this year into its Responsibly Managed portfolio range.
The portfolios, which today are marking their third anniversary since launch, have seen AUM grow as investors increasingly turn to ESG solutions for conscientious investment of their wealth.
Launched in 2017 when ESG solutions for discretionary managed portfolio providers were in their infancy, the Responsibly Managed range was designed to offer a pragmatic balance between managing risk and returns, while investing for good. The portfolios, which cater for investors with differing risk profiles and time horizons cover a spectrum of investment strategies that aim to deliver a positive effect from investing via three important premises: ‘Do More Good/Do Less Harm/Deliver on Risk and Returns’.
Rob Gleeson, Chief Investment Officer at FE Investments, says: “There’s no doubting that ESG investing has exploded in popularity, particularly in the wake of the Covid-19 pandemic, where there has been much discussion on how the recovery and economy of the future should look. The AUM we have seen flooding into our Responsibly Managed range demonstrates the direction of travel.
“Nonetheless, while most investors are perhaps familiar with ESG investing as an overarching concept, there remains a significant knowledge gap about what ESG investing actually entails and the forthcoming changes to MiFID II and ultimately to CoBS. The Responsibly Managed range was designed to be as pragmatic and as transparent as possible so that advisers can find the solution which best meets their clients’ needs.”
The portfolios were specifically designed with financial advisers in mind. Under MiFID II regulations set for implementation in March 2021, advisers will be obliged to consider environmental sustainability in the advice process. The FCA are set to follow suit and are due to announce changes to CoBS to align the UK rules to Europe. This means that advisers must ask clients about their sustainable investing preferences, that they should consider sustainable investing risk and to offer a responsible investment portfolio option.
Gleeson adds: “With the MiFID II deadline fast approaching, and the FCA soon to finish consultation on sustainability, many advisers will no doubt be looking for relevant ESG propositions in order to meet their compliance obligations. The issue with many ESG propositions is that unlike our Responsibly Managed range, they will have only been launched recently and do not yet have comparative performance data in order for advisers to provide meaningful analysis.”