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EU ESG UCITS to Pass €9trn by 2027

New research published by PwC Luxembourg suggests that EU-domiciled ESG UCITS funds could reach over €9 trillion (US$9.6 trillion) in AUM by 2027. All funds categorised as Article 8 and 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR) reached €6.2 trillion at the end of 2023, the report said, which is equivalent to a €1 trillion increase year-on-year. ESG UCITs funds make up 45.7% of the total AUM of the Article 8 universe and 60.8% of all Article 9 funds. “We do not expect this growth to slow down anytime soon,” said Frédéric Vonner, Partner and Sustainable Finance and Sustainability Leader at PwC Luxembourg. “While equities remain dominant, we see growing interest in Article 8 money market funds and passive options, such as Article 8 and Article 9 exchange-traded funds (ETFs), which now represent 24.4% of the AUM of EU ETFs.” With the review of SFDR ongoing, Vonner noted that investors can expect greater clarity and standardisation in the years to come, which, in turn, will likely “further propel the growth of sustainable investing in the EU”.

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