Good Wind in Funds... Popularity of ESG and SRI

Q1 Inflows of 500 Billion KRW Each
Returns Solid at 5.8% and 3.9%
New Deal Fund Also Sees Inflow of 800 Billion KRW

[Asia Economy Reporter Song Hwajeong] As interest in ESG (Environmental, Social, and Governance) grows, funds related to ESG poured in during the first quarter of this year, reflecting this interest in investments.

According to financial information company FnGuide on the 31st, ESG funds (equity) attracted 508.4 billion KRW in funds since the beginning of the year. SRI (Socially Responsible Investment) funds also saw an inflow of 589.4 billion KRW since the start of the year. Green growth funds attracted 836.4 billion KRW, indicating growing interest in eco-friendly and other ESG-related investments.

Returns were also favorable. ESG funds recorded a return of 5.79% since the beginning of the year, outperforming the KOSPI, which rose 4.26% during the same period. SRI funds posted a return of 3.87%.

Researcher Oh Kwangyoung of Shin Young Securities said, "Since the COVID-19 pandemic last year, global interest in ESG has increased, making it a mega trend in investment." He added, "In Korea as well, the largest number of new ESG funds were launched last year on an annual basis, and the scale of fund inflows surged, somewhat following the global trend." Oh also noted, "This trend continues this year with new ESG funds being launched and steady inflows of investment funds."

Researcher Kim Sangho of Shinhan Financial Investment explained, "ESG active funds have the advantage of quickly reflecting changes in ESG environments of companies in their portfolios." He added, "Generally, data for ESG evaluation lags behind financial information by more than a year, so even if a company’s related information has actually changed, there can be a gap where ESG rating agencies’ scores do not reflect this. However, active funds can quickly incorporate ESG information into their portfolios."

In addition, funds continue to flow into New Deal funds, which recently sold out and attracted attention. Since the beginning of the year, 839.5 billion KRW has flowed into New Deal funds. After the first launch of the 국민참여 정책형 New Deal Fund on the 29th, it quickly sold out. Allocated quantities from Korea Investment & Securities, Yuanta Securities, Hana Financial Investment, and Korea Post Securities were all exhausted. Researcher Oh said, "With the government’s implementation of New Deal policies, inflows into related New Deal funds continue, and it is positive that funds are flowing into funds that respond to the government’s eco-friendly policies and also consider ESG factors."

This content was produced with the assistance of AI translation services.