Experts like Jennifer Bartashus, Drew Reading, and Steve Mills discuss Walmart and Home Depot earnings, China tariffs, and AI ethics in business. They dive into retail trends, e-commerce, homebuilding, and the risks of AI. The podcast offers insights on Tesla's competition in the US market and President Biden's tariffs on China.
Outflows from ESG ETFs in the US are driven by model portfolio changes, while Europe sees more flows.
Concerns about ESG strategies and concentration risks lead to a trend of fund closures and consolidation.
Deep dives
Decrease in ESG ETF Flows in 2022
ESG ETFs have experienced a decrease in inflows and an increase in outflows in 2022, with a notable concentration of outflows from a few funds. In Q1, liquidation of US ESG ETFs accounted for nearly 30% of all closings this year, particularly driven by model portfolio changes.
Outflows Concentrated in a Few Funds
Outflows from ESG ETFs are concentrated in a few funds, such as the iShares ESG aware ETF, attributed to model portfolio changes. The trend of outflows is more pronounced in the US compared to Europe, indicating a more significant backlash against ESG in the US.
Factors Driving ESG ETF Outflows
In the US, ESG ETFs experienced significant outflows in Q1, while Europe saw most of the flows. The reasons for outflows are attributed to model portfolio adjustments and possibly investor model behavior beyond direct ESG considerations. The concentration of outflows in specific funds highlights the volatility in ESG investing.
Reasons Behind ESG ETF Liquidations
The decline in ESG ETF flows in 2022 reflects a maturity and concentration of the market, with notable fund closures. The industry saw a surge in supply in 2020 and 2021, leading to a phase of fund closures and consolidation. Concerns about ESG strategies and their concentration risks contribute to the ongoing liquidation trend.
On this week’s podcast: Jennifer Bartashus, Bloomberg Intelligence Senior Analyst, Retail Staples & Packaged Food, discusses Walmart earnings. Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence, discusses Under Armour earnings. Drew Reading, Bloomberg Intelligence U.S Homebuilding Analyst, breaks down Home Depot earnings. Steve Mills, Boston Consulting Group Chief AI Ethics Officer, talks about the risks for businesses when using AI. Eric Martin, Bloomberg International Economic Reporter, discusses President Biden’s China tariffs. Corey Cantor, BNEF Lead US Electric Vehicle Analyst, discusses how Tesla's distractions have created space for competitors in the US.
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