Sustainable Product Market Grows

Canada is seeing growth in its sustainable investment product market, says Morningstar Research data. It says there were 28 new Canadian-domiciled sustainable investment products launched in the first quarter of 2022, more than were launched in the previous two quarters combined. A total of C$470 million in assets were brought in by these new products, compared to $258 million in the fourth quarter of 2021 and just $50 million in the third quarter of 2021. Active strategies are clearly leading the space, accounting for 82 per cent of assets compared to 18 per cent for the passively-managed sector, although this was the highest share for passive strategies in more than a year. Growth was 45 per cent for active and 33 per cent for passive. However, performance of sustainable funds and ETFs was weaker than their peers as only 29 per cent of equity funds, 48 per cent of fixed income, and 14 per cent of allocation funds outperformed.