“A trend we have seen over the past 12 months is increased requests for ESG investments in institutional product lineups,” said Michele Giuditta, associate director at Cerulli. “The other two most-requested products were emerging market and long-duration fixed-income products.”
Cerulli notes that institutional investors are continuing to move away from traditional asset classes in search of higher returns and greater diversification in response to uncertainty in the global economy and capital markets.
“We have found that many large public pension funds are adopting processes for integration of ESG investments into their portfolio,” explained Giuditta. “As institutional markets become increasingly competitive, asset managers are finding ways to diversify their offerings, and socially responsible investing is one form of diversification we are seeing.”
These findings are noted in the “Cerulli Quantitative Update: U.S. Institutional Markets 2012: Implementing Effective Sales, Service and Product Strategies.” This annual report looks at institutions’ current use and future appetite for collective investment trusts (CITs), exchange-traded funds (ETFs) and hedge funds. It provides market sizing data for each institutional market—endowments and foundations, public and private defined benefit (DB) and defined contribution (DC), and insurance general accounts.Information about how to purchase the report is here.