Sustainable products account for 50% new business in German mutual funds
Mutual funds, which account for two-thirds of sustainable assets in Germany, saw new business of €12bn in the first quarter of 2021, according to latest data from German funds association body, BVI. This is an increase of more than 50% when compared to the last quarter of 2020. During the first quarter of 2021, sustainable products accounted for almost half of the new business in open-ended funds.
The net flows of sustainable institutional funds stood at €420m. Currently, funds with a sustainability strategy, corresponding to Article 8 of Sustainable Finance Disclosure Regulation (SFDR), dominate mutual (93% of assets) and institutional (99%) funds.
In terms of asset class, equity funds in sustainable open-ended mutual funds accounted for a 32% share, significantly lower than the average for mutual funds. Meanwhile, mixed funds represent a 24% share followed by bond funds (19%). Sustainable real estate funds’ share increased from 1% at the end of 2020 to 11% at the end of March.
Overall, Germany’s sustainable fund assets increased by €107bn in the first quarter of 2021, touching €254bn. The data indicates that many companies have taken the new EU regulations such as the SFDR to adjust previously conventional products to sustainable investment strategies.