• Gustavo Bernal Torres

Pressure to Bring Down ESG Fund Fees

How much of a premium are investors willing to pay for ESG funds to achieve a positive impact, and how will full integration affect fees in the active and passive space?

  • "First, we are starting to see more sustainable products in the market, and with increased competition comes increased cost pressure. Second, as managers start to incorporate ESG and sustainable practices more fully into their standard risk assessment process, it becomes harder to justify higher fees to clients for doing 'additional work'"

  • While in the past, sustainable funds might have charged in excess of 1%, currently they tend to have much lower introductory rates, usually around 0,45%.

  • According to Refinitiv Lipper, ESG funds have shown a steady decline in fees, and today fees for ESG alternatives are broadly in line with non-ESG counterparts in both the active and passive space.

Source: https://mydigitalpublication.co.uk/publication/?m=63100&i=684841&p=24 & https://esgclarity.com/pressure-to-bring-down-esg-fund-fees/

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