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Pass me the green

Inside this edition we revisit the integration of Ethical, Social and Corporate Governance considerations through Exchange-Traded Funds (ETFs).

Given this is a popular and growing sub-segment of the funds management industry, we both look to the future and review past performance outcomes from the current listed product suite. Our findings suggest that clients have been inadvertently positioned into Information Technology and growth stocks as a result of product take-up. This can result in greater tracking error and detract from product/issuer core competency.

Bell Potter is of the view that a value or style neutral manager; and more importantly with an impact focus, can function as both a cornerstone or satellite piece in the current market of addressing ESG requirements.

Figure 1 – Equity ‘ESG’ ETF cumulative net money flow

Figure 2 – Top ETF flows for February 2023

Figure 3 – Top ETF flows for 12 months ending February 2023

Figure 4 – ETF market size as at February 2023

Figure 5 – Trailing average daily volume and value

Authored by Hayden Nicholson – Specialist Exchange Traded Funds & Listed Investment Companies at Bell Potter Securities, 24 March 2023
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Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended.