Dzmitry Lipski, Head of Funds Research at interactive investor, comments on the continuous popularity of sustainable funds with investors, despite shaky short-term returns.

In line with Good Money Week this week, interactive investor, the UK’s second-largest investment platform for private investors, unveils new data showing that investors are not throwing in the towel on sustainable investments, despite recent underperformance.

ii’s data today shows that actually, exposure has gradually been creeping up.

In 2023, so far (data to 31 Aug 2023), the overall portfolio exposure to sustainable investing stands at 2.44%, marking a steady climb from the previous years: 1.59% in 2020, 1.99% in 2021, and 2.17% in 2022.

Dzmitry Lipski, Head of Funds Research at interactive investor, comments:

It is fascinating to see that ii customers are not necessarily being put off by shaky short-term returns for sustainable investments, and if they choose to, are continuing to align their money with their ethical/sustainable values.

This gradual increased exposure, particularly among women and the younger cohort on the platform, mirrors wider industry sentiment that sustainable investing is more than just a ‘fad’. Sustainable investing has the potential to offer investors exposure to companies with more resilient business practices, risk-adjusted returns, and those best placed to contribute to and benefit from a more sustainable future.

Of course, we must address the elephant in the room – it is no secret that, in the short-term, sustainable funds have struggled in the recent harsh investment landscape.  And the issue of potential greenwashing has made careful research all the more crucial.  Energy security and mixed messaging on net-zero commitments may also have impacted investor confidence.

Full release: Good Money Week 2023: Private investors continue to back sustainable investments long-term, despite recent shakiness

✉️ Jemma Jackson, interactive investor, 07818 076 218