Jean-François Bay, Managing Director Quantalys France Harvest Group, explains to Romain Thomas why the appetite for ESG ETFs is growing in Europe, especially in France.
1.What is the ETF Management Observatory Harvest Group?
We have decided to launch the ETF Management Observatory in 2020 through a partnership with BNP Paribas Asset Management in order to provide reliable, independent and in-depth data on the ETF market at European level. For an independent analysis company such as Quantalys, it is necessary to offer to our clients dedicated ETF research to help them to better understand market trends.
2. Is it hard to get the data?
No, because all data collection is implemented in-house. Our platform is one of the largest and highest-quality global investment databases in Europe. We offer an extensive line of products and services for institutionals, financial advisers, family offices and insurance companies to help them make better investment decisions.
3.What is the appetite for ESG ETFs in France; will they expand across Europe?
The results of our survey highlight the growing appetite for ESG ETFs. Last year, these products greater net inflows (EUR44 billion) than non-ESG ETFs (EUR24 billion). This trend began in 2021 and moved forward in 2022, when ESG ETFs accounted for 65 per cent of net flows compared to 55 per cent the previous year. ESG ETFs are also very popular with French investors because most of them consider that the impact of investments on the quality of the environment (pollution, biodiversity etc.) becomes an important issue and are therefore more focused on environmental issues.
4. Are appetites for ESG changing?
A lot of european investors are increasing their exposure to ESG ETFs. But, at the same time, they are looking to impact funds (i.e SFDR 9) and to more thematic ESG ETFs, based on circular economy or waste management for example. By the way, at the present time, the BNP Paribas Easy EFT range lies mainly in its ESG expertise that is at the heart of its investment strategy.
5.How do you explain the increasing ETF popularity with wealth management and private investors in France?
ETFs are becoming more popular with individual investors, especially millennials via online brokers and digital platforms such as SaxoBank, TradeRepublic or eToro. In addition, more and more financial advisers and insurance companies are increasingly offering ETFs in their fund selection. For example, in life insurance wrappers (Assurance Vie), they can be used as part of a core investment. The number of wrappers that contain at least one ETF has risen from 38 per cent in 2021 to 44 per cent last year. These life insurance contracts referenced an average of 31 ETFs in 2022 compared to 20 in 2021.