Next-Finance : What has been the evolution of ETF assets since the start of the year?

Bertrand Alfandari : After a very dynamic year 2019, the growth of the ETF market continued during the first nine months of 2020. Thus, according to ETFGI, at the end of September 2020, the assets under management rose by 8.3% in the world and 7.6% in Europe since the start of the year, respectively at 5 640 billion and 868 billion euros.

Which asset classes have been the most dynamic?

Over these first nine months, worldwide net inflows amounted to 365 billion euros, including 45 billion euros for the European market. In detail, in Europe, net inflows had been mainly focused on bond products, but globally US equity ETFs generated the most interest from investors.

What trends do you see in the ESG ETF market? Has the stock market crisis of the 1st quarter of 2020 been an accelerator on this ESG theme?

The momentum is still very strong on ESG ETFs, in particular in Europe which represents, with 56 billion euros at the end of September 2020, almost half of the global outstanding amounts of this type of trackers (108 billion euros). Indeed, on the European market, since the start of this year, nearly half of the inflows have been focused on ESG ETFs (22 billion euros). Market crisis of Q1 2020 has undoubtedly prompted investors to be even more selective and to take extra-financial criteria more into account in their portfolio management. ESG investing has long been evident in index fund management, and it is a real underlying trend.

More recently, in May 2019, we launched an ETF specializing in the circular economy that allows investors to gain exposure to 50 international stocks selected for their active participation in the circularity of goods, materials and commodities.

Bertrand Alfandari, Head of business development ETFs & INDEX FUNDS at BNP Paribas Asset Management

BNP Paribas Asset Management has been active in the Low Carbon and Circular Economy themes. Can you give us an update on these themes, and also on your blue economy ETF that you have just launched?

Indeed, in recent years, we have continued to strengthen our range of trackers with a particular emphasis on ESG. After launching the first ever ETF on the “low carbon” theme in 2008 - with 840 million euros of outstanding assets right now - we continued to expand our range by developing other ESG themes through an ETF replicating an ESG infrastructure index, a European SRI Small cap index or a responsible listed real estate index. More recently, in May 2019, we launched an ETF specializing in the circular economy that allows investors to gain exposure to 50 international stocks selected for their active participation in the circularity of goods, materials and commodities. Finally, last October, we launched a blue economy ETF (BNP Paribas Easy ECPI Global ESG Blue Economy UCITS) which aims to invest in companies likely to seize the opportunities offered by the sustainable use of ocean resources. This ETF replicates the ECPI Global ESG Blue Economy index, composed of companies involved in the ocean economy and meeting the needs of the United Nations Sustainable Development Goal 14 (SDG) relating to aquatic life and classified in five sectors: coastal protection and ecological tourism, energy and resources (wind power, maritime energy, etc.), fishing and food from the sea, pollution reduction and ultimately maritime transport.