BlackRock funds ride high on ethical investment inflows

BlackRock funds ride high on ethical investment inflows

By building a dominant suite of exchange traded funds, BlackRock has also developed a marketplace for people eager to align their beliefs with environmental and socially-conscious investments.

Competitors are now springing up, such as the start-up investment fund Engine No. 1. Nevertheless, BlackRock, under chief executive Larry Fink, remains by far the largest player in ETFs that have environmental, social and governance (ESG) characteristics — via its iShares range.

Independent investment research group CFRA calculates that almost 60 per cent of all assets in ESG ETFs are held through BlackRock — and 64 per cent of new net fund flows into such funds in the past year have gone to BlackRock.

As a result, BlackRock manages seven of the 10 largest ethically-themed ETFs in the US and the three largest such funds in Europe, according to data provider Morningstar.

“In the ESG space specifically, BlackRock has been very dominant,” says Aniket Ullal, head of ETF data and analytics at CFRA.

Although Europe has led the development of ESG products, Americans have more money invested specifically in ESG ETFs. BlackRock’s ESG Aware MSCI USA ETF, alone, has $24bn of assets under management, Morningstar reports. That is more than double the largest equivalent ESG fund domiciled in