The fastest-growing segment in the ETF space

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Inflows into environmental, social and governance investments have exploded over the last few years, and no one has seen this more clearly than the managers at BlackRock, the world's largest fund manager.

The demand has been particularly apparent in exchange-traded funds, says BlackRock's relationship manager and iShares investment specialist, Blair Hannon. The team have been creating products at an amazing rate, and investors keep snapping them up.

"Even three or four years ago, we had circa 25 products in sustainable ETFs," Hannon says. "We've now got greater than 220 products and that's continuing to grow. From an assets under management point of view, that has grown 33%, just this year to date."
"We're now sitting around US$130 billion, which is significantly greater than the whole ETF market in Australia," he said.

Investors are also becoming more discerning and more demanding about which ESG products they are willing to invest in.

"Investors are saying to us that the element of something like a 'greenwashing' process — where someone's stuck the sticker on the front of a product and are calling it ESG — is not going to work," he says.
In this video, Hannon explains what's driving this mass uptake of ESG-related investments and how investors can be discerning in their choices.
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