The top 100 environmental, social and governance funds had an aggregate of $440bn in assets under management in 2022, with Blackrock as the largest ESG fund manager, according to management consultancy Opimas.
The 100 funds were managed by 37 different asset managers with BlackRock accounting for 20 ESG funds with total assets under management of $110bn. In second place was Germany’s DWS with $36bn, followed by Parnassus Investments in the US with $33bn, according to Opimas’ report last December, Benchmarking the World’s Top 100 ESG Funds.
Chief executive Octavio Marenzi and analyst Anne-Laure Foubert said in the report: “Parnassus stands out for the size of its ESG funds – it has only three funds on the list.”
The study highlighted a major deficiency, which is the lack of a clear global agreed definition of ESG. To select ESG funds for its analysis the Opimas team reviewed the legal and marketing documents for each fund, amongst other available information.
Amongst the top 100 ESG funds, equity funds accounted for three quarters of funds by number and 81% of assets under management, followed by fixed income.
Opimas noted that 2022 was a difficult year as all the top 100 ESG funds, except one, had negative returns, although most had positive three-year returns. In addition, on average, the top 100 ESG funds outperformed their benchmarks by 1.1% in 2022.
“The global outperformance of these funds compared to their benchmark is remarkable,” added Opimas. “Despite particularly tough market conditions in 2022, many of the largest ESG funds were able to drive alpha for their clients, regardless of their diverse approaches to ESG investing.”
The most widely used strategies by the top 100 ESG were exclusionary screening, ESG integration and positive screening with impact and best effort strategies less frequently used.
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