China, Hong Kong must look offshore for ESG ETFs

Assets in ESG ETF products globally have almost doubled since 2016, but not one of the products is authorised for sale in Greater China.


Drew Wilson

Not one sustainable-themed ETF is authorised for sale in China, Hong Kong or Taiwan, according to FE data. However, there seems to be opportunity to attract investors into the asset class.

In Greater China, Taiwan- and Hong Kong-based institutional investors and financial advisers are willing to invest in ESG ETFs, according to a survey conducted by Brown Brothers Harriman last year.

Source: Brown Brothers Harriman


The absence of sustainable-themed ETFs in Greater China contrasts with global growth of the products.

Globally, in 2018 total assets invested in ESG ETFs and ETPs rose 29.5% and now stand at $22.47bn, according to ETF research firm ETFGI. While assets are still small compared to the global fund market, the growth trajectory shows nearly a doubling of assets since 2016.


Global ESG ETF/ETP asset growth

Source: ETFGI


As of 2019, there are 208 ESG classified ETFs/ETPs, from 61 providers listed in 23 countries, according to ETFGI.

In Asia, the exception is Singapore, which has 11 sustainable themed ETFs with at least a one-year track record authorised for sale, according to FE.

Singapore’s sustainable-themed ETFs

2018 return 
UBS – ETF -Bloomberg Barclays MSCI US Liquid Corporates Sustainable UCITS ETF  -3.05%
UBS – ETF – MSCI USA Socially Responsible UCITS ETF  -3.86%
S&P 500  -4.38%
VanEck Vectors – Global Alternative Energy  -7.27
UBS – ETF – MSCI World Socially Responsible UCITS ETF  -7.40%
iShares – Dow Jones Global Sustainability Screened UCITS ETF  -8.61%
CIMB – S&P Ethical Asia Pacific Dividend ETF  -9.46%
UBS – ETF – MSCI Emerging Markets Socially Responsible UCITS ETF  -11.9%
UBS – ETF – MSCI EMU Socially Responsible UCITS ETF  -12.55%
UBS – ETF – MSCI Pacific Socially Responsible UCITS ETF  -13.94%
UBS – ETF – MSCI Japan Socially Responsible UCITS ETF  -14.55%
iShares – Dow Jones Eurozone Sustainability Screened UCITS ETF  -14.65%
Source: FE. Sustainable ETFs authorised for sale in Singapore. Calendar year 2018 performance in US dollars.

This article first appeared on ESG Clarity‘s sister site, Fund Selector Asia.


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