Has the US witnessed a shift in perspective regarding ESG? Anti-ESG funds launched in recent years as alternatives to ESG funds, and in response to the polarized attitude towards ESG in the US, are now experiencing a significant decline in sales momentum, raising concerns about their long-term viability According to a Morningstar report focusing on the US market, sales of these funds peaked at $377 million in the third quarter of 2022 but have since dropped to $183 million in the first quarter of this year. Despite overall assets increasing to $2.1 billion by March, it remains unclear whether anti-ESG funds have staying power. Morningstar classifies these funds into different subclasses, including "anti-ESG," "political," "renouncers," "vice," and "voter" funds. Strive Asset Management, assigned to the "voter" subclass, initially attracted enthusiasm but subsequent fund rollouts saw diminished sales. Constrained Capital ESG Orphans ETF (an 'anti-ESG' fund investing in fossil fuels, nuclear energy, weapons and munitions, tobacco, alcohol, and gaming) recently filed for liquidation, with only $3.4 million in assets, which is hopefully an omen for the investing theme. Do you think this marks a significant shift in the attitude towards ESG in the US?
Anti-ESG funds fail to gain traction in the US
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Béatrice Méthé
Co-Founder, Primera Purpose Advisory
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