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RPT-U.S. 'socially screened' funds draw second-biggest inflows ever

From Reuters - January 14, 2018

(Repeats Jan. 12 story with no change to text)

By David Randall

NEW YORK, Jan 12 (Reuters) - U.S. investors poured $4.7 billion into so-called socially responsible mutual funds and exchange-traded funds in 2017, the categorys second-biggest annual inflow ever, with managers pointing to Trump administration policies as a reason for the move.

The industry remains relatively small, with an estimated $2.6 trillion in funds that screen investments based on companies social and environmental impact, compared with $16.3 trillion in all funds, according to the Investment Company Institute trade group.

Fund managers and advisors said interest in socially conscious investing was boosted by President Donald Trump in June announcing his intention to pull out of the Paris Climate Accord, arguing it would undermine the U.S. economy.

Trump saying he would withdraw the U.S. from the Paris Accord was the biggest single driver and served as a call to arms for pension funds and other investors to step up, said William Vaughn, a research analyst at Philadelphia-based Brandywine Global, which manages approximately $74 billion in assets.

Inflows into socially screened funds typically do not track those of the broader market, due in part to a smaller investor base that tends to keep their money invested regardless of year-by-year performance.

Indeed, inflows into such funds and ETFs grew by 22 percent in 2017, compared with a 232 percent increase into mutual funds and ETFs overall.

But the 2017 inflows into socially screened funds marked a 340 percent jump from 2013, when investors directed just $1 billion into the category, according to Lipper data. By comparison, inflows into all funds grew 154 percent from 2013.

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