Dutch private investors are showing increasing interest in ESG ETFs (Exchange Traded Funds) with a focus on environmental, social and governance aspects. This is evident from a new study by asset manager Invesco. According to the research, 43% of Dutch investors’ ideal portfolios are allocated to ESG ETFs and there is a trend of growing interest in sustainable passive investment strategies.
The research, based on the opinions of 750 Dutch private investors, shows that ETFs are frequently used to invest in ESG themes. A whopping 72% of those investing in ESG-related products use ETFs for some portion of those investments, with ESG ETFs accounting for almost half (46%) of their total ETF portfolio.
Additionally, smaller investors appear to have significant interest in increasing exposure to ESG ETFs in the coming years. Of those currently invested in ESG ETFs, 43% expect their exposure to increase, while only 9% plan to reduce it.
Investors who do not currently invest in ESG ETFs also want to do so in the next three years. The research shows that no less than 72% say they are considering this, while 7% indicate that they do not want to do so. Invesco sees this positive attitude towards ESG ETFs among investors with portfolios of varied sizes and with different investment experience levels.
The research also focuses on preferences for the “E” (environmental), “S” (social), and “G” (governance) aspects of ESG. Environmental considerations are found most attractive by 39% of Dutch investors, followed by governance (28%) and social considerations (19%). Specific environmental themes, such as renewable energy and nature conservation, are important to private investors, as are social factors such as human rights and diversity.
The research also highlights the need for more information about ESG ETFs. A third of investors indicate that they do not have enough knowledge to enter this investment segment. This makes it clear that the financial sector must do more to provide education and awareness around ESG investments.
Invesco’s research is part of a broader European survey among 5,500 investors in seven European countries. The research shows that the demand for sustainable passive investment strategies is increasing across Europe. ESG ETFs now occupy a larger share of the market than ever before ($210 billion in new assets), indicating a growing interest in responsible investing.