ESG is no passing fad, as more investors are convinced that alpha can be found in ESG and regulators continue to introduce rules to lift ESG standards.
Fund inflows amounted to S$8.57 billion ($6 billion) in the fourth quarter, while outflows reached S$7.01 billion ($4.9 billion).
Approved products under the CPF Investment Scheme (CPFIS) managed to end the quarter with a net inflow of S$43.8 million ($30.66 million), improving on the S$20.1 million ($14.07 million) in the previous quarter. CPFIS inflows as a percentage of total fund flows, however, slipped to 5.1% or S$433.6 million ($303.52 million), although these were offset by a lower proportion of redemptions, with CPFIS outflows amounting to 5.6% of total outflows or S$389.8 million ($272.86 million).
The downturn and heightened volatility in equity markets in the fourth quarter took a toll on equity inflows, according to the report.
ôInvestors were spooked by surging oil prices, while the worsening credit situation took a hit on the earnings charges of key financial institutions such as Citigroup and Merrill Lynch,ö says Kenneth Koh, Singapore-based head of research for Asia ex-Japan at Lipper.
Equity fund subscriptions and redemptions were in turn more muted, with equity unit trusts witnessing a net inflow of only S$720.0 million ($504 million), after topping S$1.69 billion ($1.19 billion) in the previous three months. Equity inflows totaled S$5.18 billion ($3.63 billion) û 60.5% of total fund inflows û while equity outflows of S$4.46 billion ($3.12 billion) were recorded. Emerging markets portfolios as well as Greater China-based funds saw active trading, while further redemptions were again seen in global real estate funds.
Fixed-income funds posted net inflows of S$88.4 million ($61.88 million) on the back of S$737.5 million ($516.25 million) in fund inflows and redemptions of S$649.1 million ($454.37 million), with domestic Singapore-dollar offerings capturing most share of the assets. Some interest was also seen in short-term, US-dollar portfolios and portfolios investing in global sovereign issues. Investments in broadly diversified products and mixed-asset funds picked up to S$543.6 million ($380.52 million) as more risk-averse monies flowed into product classes such as balanced Singapore-dollar portfolios.
Among the other asset classes, protected and guaranteed funds continued to see further redemptions, with net outflows of S$43.01 million ($30.11 million) and S$26.30 million ($18.41million).
In its second annual sustainable investment report, the sovereign wealth fund says it invested $1.79bn in ESG bonds. Experts say asset owners next need to consolidate their standards.
Senior executives at the Taiwan financial group and Canadian pension fund believe that companies have to make an ESG transition, and may not have a choice in a few years.
Record low borrowing costs in Australia are feeding demand for the country's real estate, with domestic and global investors raising their allocations into the sector.
Experts have a diversified view on the appeal of private assets across the region, but one thing's for certain - inflows are rising, particularly into China and the US.