Investors are increasingly thinking of new-style ESG exchange-traded funds (ETFs) as active strategies, even though ETFs traditionally track a certain index, according to a new survey.

BNP Paribas Asset Management (BNPP AM) said of its recently-launched European ESG ETF Barometer that 82% of respondents considered thematic ESG ETFs to be active strategies.

The poll, conducted in April by FT-firm Longitude on behalf of BNPP AM, showed ESG ETFs to be currently accounting for 16% of all European ETF assets.

Some 91% of survey respondents said they expected that level to remain stable or increase over the next 12 months, according to BNPP AM.

The ESG ETF Barometer is to be a twice-yearly survey, according to the asset manager, with the first one having quizzed asset managers and asset owners based in France, Germany, Italy, Switzerland and the UK.

Denis Panel, head of multi-asset, quantitative and solutions at BNPP AM, said: “The results not only validate the necessary move towards sustainable indices, including Paris-Aligned Benchmark standards, which BNPP AM adopted at the end of 2021, but also show the increased use of ETFs as a means of accessing ESG themes, with the divide between what has previously been considered ‘active’ and ‘passive’ becoming increasingly blurred.”

The French firm said that overall the poll showed investors to be keen to see more focus on social issues within ESG engagement and voting practices, with 43% having said they wanted more focus on employee rights and 42% on board diversity.

Separately, another ETF survey showed one in 10 European professional investors as rating the current ESG offering in the fixed income ETF market as poor, with a further 29% describing it as average.

The poll from European ETF provider Tabula Investment Management – which took in responses from 100 professional investors in Italy, France, Germany, the UK and Switzerland – resulted in just 7% of respondents believing the current range of ESG fixed income products available to be excellent, with the rest saying it was quite good.

Tabula said 60% of respondents had said they wanted to see more innovative products available, and 54% wanted to see better coverage across different fixed income asset classes.

Some 44% wanted greater transparency, the firm said.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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