The number of ESG labelled fund products in Europe soared by 89% last year, new research from Fitz Partners has revealed.
The independent research company, which reviewed over 4,000 Clean (clean of any retrocessions) share classes for equity and bond cross-border funds, also found that ESG funds remain cheaper than non-ESG funds. On average, ESG-labelled equity funds’ management fees stand at 0.78%, while the corresponding fees for non-ESG remain at 0.80%.
For ESG-labelled bond funds, the average clean management fee is 0.50%, while non-ESG funds also remain higher at 0.53%.
In Fitz Partners’ review 12 months ago, average fees for ESG labelled equity and bond funds were both showing lower averages at 0.76% and 0.46% respectively.
The firm isolated clean classes which were in existence 12 months ago and were not labelled as ESG then but have since been repositioned or labelled as ESG in the last year. These newly labelled share classes still show an average clean management fee in line with current non-ESG funds at 0.80% and 0.55% for equity and bond funds respectively.
Hugues Gillibert, CEO of Fitz Partners, said: “For a few years now, new launches of ESG labelled funds have weighted significantly in the universe of ESG funds and have kept management fees lower on average than non-ESG fund products in Europe. In the past year a fair share of the increase in ESG labelled funds has come from the repositioning of existing funds as ESG products.
“Unlike new fund launches, these funds new to the ESG universe have not altered their pricing while transitioning to ESG and have inflated the overall ESG funds costs.”
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