Amundi and DWS are standout names when it comes to ESG-branded assets, flows and their performance according to the latest research conducted by Credit Suisse equity research team.
The firm’s latest paper singled out DWS as its top European pick, given it discloses €451bn of ESG-integrated and €70bn of ESG-dedicated assets under management.
‘Our analysis suggests DWS has seen strong positive momentum in ESG flows in 2020 to date ($1.9bn) and, with improving performance of its ESG funds, we believe this is likely to continue,’ it said.
The report also noted that over one year 14 DWS ESG funds with nearly $3bn in assets ranked in the top two quartiles compared to peers.
‘We see DWS accessing the current demand for ESG investment, with a fast pace of fund launches planned for this year, and accurate targeting of the higher-growth US ESG passive market,’ the Credit Suisse report said.
In second place, the research also distinguished Amundi, which has €314bn of responsible investments, that includes €14bn in thematic solutions, that the Credit Suisse equated to DWS’ ESG-integrated and ESG-dedicated figures.
‘Net flow momentum into ESG-branded funds was strong (€2bn) in 2019, but is a small negative 2020 to date.
‘We see Amundi being more focused on incorporating its ESG investment approach across its entire ~€600bn suite of open-ended funds (50% progress at €300bn at end-March 2020 versus 100% target by end-2021), than seeking to tap investor demand through fund launches or winning fund flows,’ the report stated.
It also highlighted Schroders, SLA and EMG as asset managers with well-formulated approaches to ESG, despite their efforts being focused on institutional clients and implementing ESG-criteria across all investment strategies, rather than launching specific ESG-branded funds.
‘We believe the latter approach is justified in the longer term, as ESG should be considered an integral part of investment analysis, rather than an ‘add-on’ for a specific group of investors.
‘However, in the nearer term, we see key fund flow advantages for those asset managers that can tap into the ‘zeitgeist’ with a significant range and value of ESG-branded funds,’ the Credit Suisse team highlighted.
As part of the analysis the Credit Suisse equity research team used Morningstar data to draw conclusions on flow trends and relative competitive strength.
Within the studied sample the team focused on the flow momentum opportunity offered by ESG funds, rather than absolute level of existing assets.