Posted inESG

FE Investments sees 125% jump in ESG model portfolio AUM

FE Investments has reported a 125% jump in the assets under management in its ESG managed portfolio service, with the firm highlighting this could grow further after 2021 regulations around advisers’ environmental considerations come into force.

The UK data and technology provider, which has an investment management business with total AUM of £3bn (€3.4bn), said asset under management in its Responsibly Managed portfolio range climbed to £91m in November from £40m in January, representing a 125% increase.

Rob Gleeson, chief investment officer at FE Investments, said: “There’s no doubting that ESG investing has exploded in popularity, particularly in the wake of the Covid-19 pandemic, where there has been much discussion on how the recovery and economy of the future should look. The AUM we have seen flooding into our Responsibly Managed range demonstrates the direction of travel.

“Nonetheless, while most investors are perhaps familiar with ESG investing as an overarching concept, there remains a significant knowledge gap about what ESG investing actually entails and the forthcoming changes to Mifid II and ultimately to CoBS.”

New regulations coming into force under Mifid II in March 2021 state advisers will be required to consider environmental sustainability in the advice process.

Meanwhile, the Financial Conduct Authority (FCA) is set to follow suit and announce changes to CoBS to align the UK rules to Europe; requiring advisers to ask clients about their sustainable investing preferences – they must tell clients to consider sustainable investing risk and to offer a responsible investment portfolio option.

Gleeson added: “With the MiFID II deadline fast approaching, and the FCA soon to finish consultation on sustainability, many advisers will no doubt be looking for relevant ESG propositions in order to meet their compliance obligations.”

Part of the Bonhill Group.