Asset managers are exceeding investor expectations on risk/return and ESG, but overall are falling short of investor demands according to the Investor Alignment Index developed by PwC. The finding is part of the “Asset and wealth management revolution: Investor Perspectives – rethinking purpose and performance” report. The survey is based on PwC’s point of view and the Investor Alignment Index developed by PwC, with responses from 750 institutional investors and 10,000 retail investors around the world. ESG investing is the number three priority of investors surveyed, as a general group, and outranks fees.
Many investors want Environmental, Social and Governance (ESG) to be integrated into funds because they believe it can generate superior financial performance by mitigating reputational, operational and financial risks. PwC believes that overall ESG mutual fund assets are set to grow at an 8.5% compound annual growth rate (CAGR) between 2017 and 2025, to reach US$2.08tn.
Our research highlights that ESG investing is the number three priority of investors surveyed, as a general group, and outranks fees. The research found that just as corporations’ ESG records are being scrutinised by analysts and rating agencies, it’s now a fundamental priority for sophisticated investors across the globe.
“As clients continue to align their personal interests and values with how they invest their money, ESG investing is now a must have, not a nice to have option when constructing an investor’s portfolio. In addition, as investor expectations continue to evolve, it’s equally important to embrace transformation as investors continue to expect more from AWM businesses.” said Olwyn Alexander, Global Asset and Wealth Management Leader.