Investors viewing ESG as a ‘safe haven’ asset
color:black">There has been a ‘massive surge’ in investors seeking environmental, social and governance (ESG) investments as they are regarded by them as a safe haven asset.
color:black">According to deVere Group, investors believe ESG investments offer them financial protection in volatile times and could retain or gain their value even in a down market.
color:black">This meant ESG was replacing assets such as US Treasuries as a defensive choice.
color:black">They were particularly popular among millennial clients with 80% of millennials including ESG credentials in their investment criteria. Given millennials were set to be the largest beneficiaries of intergenerational wealth in the coming years – an estimated US$30 trillion ($42 trillion) – this indicated ESG demand would similarly increase.
color:black">Nigel Green, chief executive of deVere, said: “There’s been a massive surge from clients this year looking for ESG investments. More than a quarter of all clients are currently considering or are already actively engaged in responsible, impactful and sustainable investing”.
color:black">He continued: “However, what is perhaps particularly interesting are the reasons why investors are seeking ESG in the first place.
color:black">“The majority [56%] now say that they perceive ESG investments as the new safe-haven asset class. As such, they are increasing their exposure to such funds in a way that traditionally they would have done with, say, gold or US government bonds.
color:black">“They would be correct in citing this view. All the latest research underscores that the majority of environmental, social and governance investments have outperformed their non-sustainable counterparts this year and have had lower volatility.”
AUTHOR
Laura Dew
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