Perhaps it’s on the “down low,” as the kids like to say, but enthusiasm for environmental, social and governance (ESG) remains. In fact, it’s palpable among some professional investors.
That could be a spark for ETFs such as the Invesco ESG Nasdaq 100 ETF (QQMG) and the Invesco ESG Nasdaq Next Gen 100 ETF (QQJG). Helped by another strong year for growth stocks, QQJG and QQMG are at pace for solid 2025 showings. Alone, that should convince market participants that these ETFs are worthy of consideration.
But there’s more to the story and those additional chapters could augur well for the long-term adoption trends of funds like QQJG and QQMG. For example, a recent survey by Morgan Stanley indicates 80% of asset allocators plan to boost exposure to sustainable investments. The bank polled money managers and institutional investors in Asia-Pacific, Europe and North America.
Encouraging Signs for QQJG, QQMG
In what could be positive news for funds such as QQJG and QQMG, the poll indicates North America is the region with the largest percentage of professional investors that plan to increase exposure to ESG/sustainable investments.
Another point in favor of the Invesco ETFs is performance. Professional investors view sustainable investments as avenues to potentially outperform plain vanilla equivalents.
“Asset owners cited performance-related criteria as the most significant drivers of their plans to increase allocations to sustainable investments, with strong financial performance of sustainable investments or ESG strategies emerging as the top reason, reported by 22%, followed by 18% of asset owners who said that sustainable investing is becoming more mature as a strategy with an established track record,” reported Mark Segal for ESG Today.
Another favorable trait possessed by the two Invesco ETFs is exposure to climate principles. Both ETFs follow indexes that adhere to guidelines laid out by the United Nations Global Compact principles, which contain some climate-specific protocols. It’s a good thing, too, because climate-geared investing is a point of emphasis for many professional market participants.
“The growing focus on climate adaptation investment opportunities comes as investors increasingly view climate change as a risk to their portfolios, according to the survey, which found that more than three-quarters of investors expect physical climate risks to have a major impact on asset prices in the next five years, including 35% anticipating major pricing impacts that are widespread across the market, and 42% that expect some major pricing impact on a limited number of assets,” according to ESG Today.
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