Nomura: Why sustainable investing does not have to mean growth

85% of Article 9 funds have growth bias

clock • 5 min read
Alex Rowe of Nomura Asset Management
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Alex Rowe of Nomura Asset Management

The current offering of ‘sustainable’ strategies has a clear bias towards ‘Growth’, which has been a strong driver of performance over the past two years.

Recent Morningstar data reveals that 85% of SFDR Article 9 Global Equity funds have some degree of ‘Growth' bias. We believe this bias is partly driven by the immaturity of the space and the approach to defining ‘sustainable' investments. More recently, oil has continued to soar, inflation has proved to be far from transitory and interest rates have risen sharply. The materially overweight ‘Growth' sustainable and impact fund sector has come under significant performance pressure. According to the Morningstar data, sustainable strategies have underperformed the MSCI ACWI by an average...

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