Investment marketers have, so far, failed to convince the UK retail intermediary market that responsible investing improves performance.
That is the conclusion from the latest UK Responsible Investing Study (UKRIS) by Research in Finance, which found that financial intermediaries are more unsure than they have ever been on whether investing responsibly can improve or hinder performance.
In the research for the latest survey – conducted throughout 2022 – 18% said investing responsibly was more likely to improve performance. This compared to 32% the previous year and 39% the year before that. The survey was conducted among 100 discretionary fund managers and 127 independent financial advisers.
“It is no secret that the performance of several responsible investment funds has struggled over the past year or so, driven by different macroeconomic factors, most notably higher oil prices,” said Jack Dominy, associate research director at Research in Finance.
“The proportion of intermediaries who state that responsible investment ‘could improve or hinder performance’ is nearly three in five, reflecting current market volatility, and the proportion stating responsible investment is likely to improve performance has decreased year on year.
“While responsible investment and ESG issues are more prevalent than ever, performance is still king, and is shaping attitudes among retail intermediaries.”
The number who said they were unsure has also grown in each year the survey has been conducted, with 57% per cent of those polled in the most recent survey saying it “could improve or hinder performance”.
In a separate analysis of fund flows by data provider Calastone, outflows from ESG funds in June accelerated after what it described as “a very bearish May”.
“Investors pulled a net £369m from the sector, the worst month on record for the sector and only the third to see outflows since the ESG boom began almost four years ago.”