Banking Exchange Magazine Logo

SRI Fund Flows Hit Record in 2020: BoA Report

Sustainable funds broke all sorts of records in 2020 as investors sought to ‘build back better’

  • |
  • Written by  Banking Exchange staff
  • |
  • Comments:   DISQUS_COMMENTS
SRI Fund Flows Hit Record in 2020: BoA Report

Last year was the biggest ever for ESG fund flows, performances and alpha generation, according to new data from Bank of America (BoA).

The US giant’s report, ESG Matters – Quant Edge, published this week, showed that flows into sustainable investment strategies reached $255 billion in 2020 – a new record.

Within equities, 1,867 ESG funds saw inflows of $194 billion, in contrast to $186 billion in outflows from other global equity funds.

A record 141 new ESG funds were launched in 2020, with seven out of 10 of these funds domiciled in Europe.

This year has started with even stronger inflow momentum for sustainable products, BoA reported. Global ESG funds have experienced $24 billion in inflows so far, running at 1.5 times the pace of flows in 2020.

There has been a surge of interest in the past year in ESG, driven by investors looking for more resilience during the Covid-19 pandemic.

Investor interest has also been boosted by governments around the world looking to transition to a low-carbon economy and encourage climate-friendly investments. Asset managers have also been touting the performance of ESG as a shield against volatility.

ESG-themed bond issuance in 2020 exceeded $500 billion for the first time ever, BoA’s data showed, with green, social and sustainability bonds all logging big increases.

Social bonds recorded the highest percentage increase in volume of issuance, up 722% from 2019 to $148 billion. Green bond issuance rose 12% to $303 billion while sustainable bond issuance jumped 82% to $69 billion.

With the election of President Joe Biden on a ticket pledging to tackle climate change, analysts expect flows to continue to accelerate in 2021.

“With regulatory changes coming to the EU and a new presidential administration in the US, 2021 will see even greater focus on environmental and social issues,” BoA stated in its report. “We expect this to mean more labelled bond issuance.”

BoA’s analysis revealed that 65% of ESG indices outperformed equivalent traditional benchmarks in 2020. However, only 30% of ESG funds were benchmarked against sustainability themed indices.

back to top


About Us

Connect With Us


Webinar: From KYC to IDV

How three leading banks are utilizing cutting-edge
digital tools to onboard, win, and wow customers

Time/Date: June 23, 2021 11:00 a.m. ET

Digital adoption, already moving at warp speed, accelerated seven years into the future during the COVID-19 pandemic. As the number of bank branches continues to fall, with at least one study predicting all branches will disappear by 2034 (Fox Business) and foot traffic declining (Vox), today’s most innovative banks are charting a new, digital-first path to win over customers while increasing security, meeting KYC compliance requirements, and winning customers to drive revenue.

In this webinar, you’ll hear from John Baird, Founder & CEO of Vouched, Tyler Crawford, COO of Bankers Healthcare Group, Anand Sathiyamurthy, CPO of Flagstar Bank and Daniel Sheehan, Chairman & CEO of Professional Bank as they describe their vision for digital transformation and how customer expectations are changing to digital first. They’ll also explore how fostering an innovation mindset creates new ways to tackle complex KYC problems and allows them to quickly compete in new markets and win customers.


This webinar is brought to you by:
Vouched Logo