Investment Officer

European sustainable funds attracted inflows of €52.6 billion in the third quarter of 2020, bringing total assets in sustainable funds to €882 billion according to figures from Morningstar.

Net inflows were slightly down from the €55.5 billion in the second quarter, but represented a bigger share (40%) of overall European fund flows. The strong inflows were driven by continued investor interest in environmental, social, and governance issues, intensified in the wake of the coronavirus pandemic, as well as the expansion of the sustainable fund universe.

The lack of available data on company-level will be the main challenge for asset managers to deal with after the regulation for sustainability‐related disclosures in the financial services sector, better known as SFDR, comes into force in March next year, according to Alfi’s Nathalie Dogniez (picture).

The US government wants to push a law through Congress that will make it more difficult for pension funds and fiduciary managers to allocate assets to ESG-driven funds or investments. The plan has sparked the ire of the asset management sector.

The CSSF is urging all financial sector workers to again work from home wherever possible. The new guidance comes after the Luxembourg government announced new restrictions to limit the spread of Covid-19 on Friday.

‘We are facing an unprecedented upsurge in coronavirus infections whose consequences cannot be measured at this stage’, the CSSF said in a press release. ‘The government indicated that the situation gives cause for concern during its press conference.’

The Sustainable Development Goals (SDG’s) are guiding the investment process of an increasing number of strategies and funds. But Covid-19 has negatively impacted most of the SDGs.

According to a recent study by M&G, Covid-19 has significantly slowed global progress towards the 17 UN Sustainable Development Goals (SDSs), five years after their launch.

The total volume of negative-yielding bonds is fast approaching the record set in early 2019. This will be a determining factor for the markets in the coming months.

The rise in negative-yielding bonds receives little attention these days as investors focus on Brexit and the US presidential elections, as the US presidential elections are likely to be decided in court. This is due to the fact that Trump will contest the result if he loses. So we’re up for a challenging couple of weeks.

Assets in Luxembourg-domiciled UCIs reached their highest level since January, according to figures published by the CSSF. Total assets rose by 1.72% to reach €4.7 trillion at the end of August.

This means assets in Luxembourg-domiciled funds have risen by €547 billion, or roughly 13%, since the end of March when they hit a multi-year low. Assets of US and global equity funds rose most in August, while assets in all bond funds except high-yield bond funds declined.

Arendt Services

Benjamin Collette has been appointed new CEO of the business, accountancy and tax services department of Luxembourg-based law firm Arendt & Medernach. He specialises in strategy, regulatory and corporate finance.

Despite the Grand Duchy’s status as Europe’s largest investment fund centre, Luxembourgers hold almost four times more money in bank deposits than in funds.