{"id":108038,"date":"2021-10-21T11:00:00","date_gmt":"2021-10-21T15:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=108038"},"modified":"2022-11-21T09:48:37","modified_gmt":"2022-11-21T14:48:37","slug":"how-do-retail-investors-feel-about-returns-from-sustainable-investing","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/esg\/how-do-retail-investors-feel-about-returns-from-sustainable-investing\/","title":{"rendered":"How Do Retail Investors Feel About Returns from Sustainable Investing?"},"content":{"rendered":"\n<p>Although the potential for higher returns matters, the main driver of retail interest in sustainable funds is environmental impact.<\/p>\n\n\n\n<p>We have all heard the story: sustainable funds are in high demand. By the middle of 2021, their assets had reached an unprecedented $2.3 trillion, mainly driven by continued growth in the European fund market (Source:&nbsp;<a href=\"https:\/\/www.reuters.com\/business\/sustainable-business\/global-sustainable-fund-assets-hit-record-23-tln-q2-says-morningstar-2021-07-27\/\">Reuters<\/a>).<\/p>\n\n\n\n<p>Net sales in the first half of 2021 had already overtaken those in 2020, which in turn were more than double those in 2019, which were more than double those in 2018.<\/p>\n\n\n\n<p>Such spectacular growth could be driven by a number of things, such as strong performance (particularly in 2020), new fund launches or existing funds being repurposed to add a sustainability tilt. The fund sales numbers would indicate that it is not just a function of increasing supply. Retail investors genuinely want to buy more sustainable funds.<\/p>\n\n\n\n<p>So what makes people attracted to sustainable funds? To what extent is this driven by return expectations? Our flagship&nbsp;<a href=\"https:\/\/www.schroders.com\/en\/insights\/global-investor-study\/2021-findings\/sustainability-hub\/\">Global Investor Study<\/a>&nbsp;can offer several insights.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-insight-1-returns-matter-to-people-but-not-as-much-as-environmental-impact\"><strong>Insight 1: Returns matter to people, but not as much as environmental impact<\/strong><\/h2>\n\n\n\n<p>The results are clear: the most important driver of interest in sustainable funds is the environmental impact they could have. The potential for higher returns matters, but it comes further down the pecking order.<\/p>\n\n\n\n<p>This is consistent across regions, but notably investors in Europe, which has the largest sustainable fund market around the world, are less likely to be influenced by return expectations than other regions. This is consistent when we look at countries within each region, for example, Germany and France compared with the US and China.<\/p>\n\n\n\n<p>In all regions and most countries, only a small percentage of people are put off sustainable funds because of performance concerns. Interestingly, performance scepticism is higher in a number of countries which have been more traditionally associated with sustainability, such as Sweden, Denmark and Germany. US and Chinese individuals, in contrast, seem to be less put off by worries about performance.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"770\" height=\"492\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/schroders_10-21-21_1.png\" alt=\"\" class=\"wp-image-108039 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/schroders_10-21-21_1.png 770w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/schroders_10-21-21_1-700x447.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/schroders_10-21-21_1-300x192.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/10\/schroders_10-21-21_1-768x491.png 768w\" data-sizes=\"(max-width: 770px) 100vw, 770px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 770px; aspect-ratio: 770\/492;\" \/><\/figure>\n\n\n\n<p>Other&nbsp;<a href=\"https:\/\/www.schroders.com\/en\/insights\/global-investor-study\/2021-findings\/sustainability-hub\/\">Global Investor Study<\/a>&nbsp;results have shown that younger investors and investors with higher levels of expertise are more inclined towards sustainable investing generally. Consistent with this, they are also more likely to view the potential for higher returns as a positive for sustainable funds.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.schroders.com\/en\/us\/insights\/equities\/how-do-retail-investors-feel-about-returns-from-sustainable-investing\/\">Click here to read the full article<\/a><\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted on October 21, 202<a href=\"https:\/\/www.schroders.com\/en\/us\/insights\/equities\/how-do-retail-investors-feel-about-returns-from-sustainable-investing\/\">1 &#8211; How Do Retail Investors Feel About Returns from Sustainable Investing?<\/a><\/p>\n\n\n\n<p>The views and opinions contained herein are those of Schroders&#8217; investment teams and\/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.&#8217;s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although the potential for higher returns matters, the main driver of retail interest in sustainable funds is environmental impact.<\/p>\n","protected":false},"author":702,"featured_media":108039,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,5924,5,6,8,9,1031,26,3],"tags":[7895,2888],"contributors-categories":[13578],"class_list":{"0":"post-108038","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-asia","8":"category-esg","9":"category-europe-middle-east-africa","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-south-america","14":"category-text-articles","15":"category-traders-insight","16":"tag-retail-investors","17":"tag-sustainable-investing","18":"contributors-categories-schroders"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - 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