Lyxor can fairly claim to have hit an investor nerve with its recent Lyxor MSCI Europe ESG Leaders UCITS ETF, the launch of which helped contribute to a record month for ESG ETF inflows according to the latest analysis from Societe General (SG).
The new fund contributed a third to the $1.5bn of inflows in February, according to SG’s findings.
Adam Laird, Head of ETF Strategy, Northern Europe at Lyxor, commented, “We are delighted to launch the Lyxor MSCI Europe ESG Leaders UCITS ETF which offers investors an efficient strategy for aligning their European equity exposure with their values and principles.
Lyxor entered the ESG arena with the ESG Trend Leaders range of sustainability-focused ETFs in March last year with that Lyxor said at the time was “an efficient strategy for aligning their European equity exposure with their values and principles.”
The range of global, US, eurozone, and emerging market ETFs provides exposure to firms with robust ESG profiles while tilting stock weights towards those that are improving that profile and come with TERs ranging between 0.20% and 0.30%.
“Building on the success of our ESG Trend Leaders suite, this new strategy further enhances Lyxor’s pedigree within the socially responsible investing space,” Adam Laird, head of ETF strategy for northern Europe said at the time of launch. “Interest in ESG-focused strategies continues to grow at a robust pace, and it is our goal to provide a comprehensive toolkit to meet investor demand.”
The index is designed to represent the performance of companies that have the highest ESG profile relative to their sector peers with a target coverage of 50% of the parent MSCI Europe Index. Companies involved in controversial businesses or whose products or activities have the potential for negative social or environmental impact are excluded.
The SG report shows that 24 new funds were launched in February in the US and Europe of which 18 were focused on equities. Thematics were at the forefront with news funds from Xtrackers focusing on AI and future mobility and another focused on self-driving vehicles from iShares.
Overall, SG found that the data pointed to something of a return for US benchmark indices which saw a flow back of $5.6bn in February after a redemptions tally in January that hit $16bn. European equities, meanwhile, gathered in their first net creations for the year while the interest in emerging market equities continued for the seventh month in a row.
The SG team also noted that in fixed income, emerging market indexations were still in demand and that corporate bonds continued to attract large inflows, albeit below the record levels set in January. To set against this, sovereign bond indexations saw net redemptions over the month, as did gold and oil ETPs.
By sector, and perhaps reflecting the flow back into US equity indices, technology benchmarks were the most popular while real estate and utilities ETFs both hit three-year highs. Financials continued to lose ground.