Original title: Nearly 230 billion!The number of newly established funds has doubled year-on-year
The development of ESG welcomes favorable policies, and ESG-related themed funds are gaining momentum. Wind data shows that as of May 27, the number of ESG investment funds exceeded 160, with a total scale of nearly 230 billion yuan. The person in charge of ESG-related products of several fund companies said that carbon peaking and carbon neutrality, as an important strategic deployment of my country in the future, will provide important opportunities for the development of domestic ESG investment.
Newly established ESG funds double from the same period last year
ESG product track is booming
Choice data shows that as of May 27, 14 ESG investment funds (combined with different shares) have been established this year, doubling from the same period last year. In terms of the scale of a single product, it is not large. Among them, three ESG products have a scale of more than 1 billion yuan. Overall, the scale of newly established ESG investment funds during the year was nearly 7 billion yuan, an increase of about 60% over the same period last year.
It is worth noting that in the past three years, the number of pure ESG-themed funds has increased significantly, and over 40% of the newly established ESG funds during the year were pure ESG-themed funds.
There are more than 160 pan-ESG funds including ESG, beautiful China, electricity, energy saving, new energy, low carbon, environment, environmental protection, carbon neutrality, climate change, green, etc., with a total fund size of nearly 230 billion yuan.
In terms of types, it covers hybrid funds, ETF products, etc., such as Dongfanghong ESG Sustainable Investment Hybrid A, Founder Fubon ESG Theme Investment Hybrid A, Wells Fargo CSI 300ESGETF, ICBC Credit Suisse CSI 180ESGETF Fund, etc.
China AMC believes that under the combined effect of the global advocacy of sustainable development and domestic trends such as “carbon peaking” and “carbon neutrality”, ESG investment in China will have a very broad space for development. ESG can provide a new way of looking at a business and looking at development beyond a financial perspective. Moreover, the ESG concept resonates with the company’s corporate culture and investment philosophy – hoping to achieve long-term and sustainable returns for investors.
Li Haiwei, Deputy General Manager of Invesco Great Wall and General Manager of Quantitative and Index Investment Department, believes that ESG concept investment is the global trend. In China, the holding cycle of ESG factors and public quantitative funds is relatively easy to complement each other. For a period of time in the future, as the market valuation bubble is squeezed out, more investment thinking will return to the source of investment. Factors such as performance stability and cash flow are increasingly valued, which is more favorable to quantitative strategies, and the comparative advantages of ESG quantitative strategies will gradually emerge.
welcome policy
The development of ESG-themed funds has a long way to go
At the end of April this year, the China Securities Regulatory Commission issued the “Opinions on Accelerating the Promotion of High-Quality Development of the Public Fund Industry”. The “Opinions” pointed out that it is necessary to guide the public offering industry to summarize ESG investment laws, vigorously develop green finance, actively practice the concept of responsible investment, improve the environmental performance of investment activities, and serve the development of green economy. In May this year, the China Securities Regulatory Commission issued a briefing on “Optimizing the Registration Mechanism of Public Funds to Promote High-Quality Development of the Industry”. The “Circular” pointed out that fund managers are encouraged to be upright and innovative, and to develop ESG products.
It is foreseeable that the scale of “ESG” funds will continue to grow in the future, thanks to the industrial transformation strategy and favorable policies. However, in the process of ESG development, there are still many problems surrounding it, such as whether ESG can really obtain excess returns. In addition, will the future development of ESG usher in more challenges from internal and external factors?
Pan Zhongning, Chairman of China Asset Management’s ESG Business Committee, International Investment Department, and Administrative Director of the International Business Department believes that implementing ESG concepts and obtaining good returns are not in conflict. On the one hand, from the perspective of “risk control”, applying ESG principles to the selection of investment targets is very effective in controlling tail risks. If the rate of return of general investment is the difference between 20% and 30%, then stepping on the thunder and otherwise is the difference between 0 and 1. On the other hand, from a positive point of view, using an ESG perspective can also help us discover high-quality targets. Conceptually, ESG investment can bring many benefits to both listed companies and investors. For listed companies, practicing the ESG concept can standardize their business operations and enable them to achieve better mid- and long-term development. For investors, combining ESG indicators with financial data for analysis can effectively measure a company’s sustainable development capability. From the perspective of investment practice, portfolios incorporating ESG strategies show a better risk-reward ratio.CICCI have counted the “return-volatility” distribution of ESG-themed and non-ESG-themed funds among domestic equity-biased funds in the past year, and found that the slope of the return volatility curve of ESG funds is higher, indicating that ESG funds have higher risk-adjusted returns.
“The current major challenge for ESG investment is that the international general ESG evaluation system is not fully applicable in the Chinese market, and the domestic ESG evaluation standards are not yet unified and mature. In addition, because my country has not yet fully enforced ESG information disclosure, voluntary disclosure of ESG information is not enough. The number of companies is still in the minority, which brings certain difficulties to the selection of investment targets. In order to cope with the challenges of ESG investment, more and more Chinese fund managers are strengthening their ESG investment research capabilities, exploring ESG evaluation systems with Chinese characteristics, and actively trying Various ESG investment strategies to promote the localization of ESG investment.” Pan Zhongning also mentioned at the same time.
The ESG fund manager of a leading fund company in Shanghai also said that when foreign investors enter the Chinese market for investment, there is a demand for ESG ratings of investment targets, but there are not many institutions in China that can provide such services, or they can directly purchase overseas institutions. However, the ratings of overseas institutions are not fully adapted to the specific situation in China, and some domestic institutions have spent huge sums of money to build their own ESG rating systems, but it is difficult to adapt to the various ESG investment needs of the domestic market in a short period of time. . The biggest problem at present is the lack of unified and quantifiable ESG evaluation indicators in China. When many investment institutions conduct ESG research, it is difficult to obtain comprehensive information on the environment, social responsibility and corporate governance of listed companies.