Fast-growing Fintech Plum has announced a major expansion of its Ethical, Social and Governance (ESG) offering as it adds two new ethical funds to its investment platform.
Plum is Europe’s most comprehensive solution for money management, combining intelligent automated saving with investments to build wealth for customers. Starting life as a chatbot for auto-savings, Plum launched its innovative investment platform in 2018 with 8 hand-picked mutual funds, growing to 10 funds in 2019.
Now its offering has expanded further with the addition of two brand-new ethical funds, both of which have had shares issued for the first time in 2020. The first, Balanced Ethical, has a broad, global remit with 61% equities, 37% fixed income and 1% cash/derivatives. The second, Growth Ethical, focuses on global high-growth companies selected on the basis of a clear commitment to ethical, social and governance.
These funds are launched in response to growing interest in ESG, as investors consider the long-term impact of their decisions and have a higher interest in social responsibility. Based on a recent report by Deloitte, it is expected that ESG-mandated assets in the United States could grow almost three times as fast as non-ESG-mandated assets to comprise half of all professionally managed investments by 2025.
The adoption of such practices both by institutional and individual investors has accelerated significantly during the last couple of years, particularly during the later stages of the COVID-19 outbreak as investors look towards the post-pandemic future. Plum already has one ESG-focused fund, ‘Clean and Green’, which saw a notable rise in allocation from 5.5% to 8.9% among new investors in the second lockdown November and December when compared to March and April 2020.
In addition to that, more sustainable investment opportunities have been one of Plum’s most requested product features. In a survey conducted with the Plum investor base in October 2020, almost 30% of investors ranked ESG funds as their top preference for new fund additions to the platform. Furthermore, around half of all Plum investors would rank a fund with an ESG focus either as their first or second choice across a broad set of fund options.
The addition of new ESG funds is the first in a series of expansions planned for Plum’s innovative investment platform over the next 9 months. The firm is soon adding its first pension product, the Plum SIPP, to the app, followed by single stocks and crypto assets by the end of the year. The company expects to have 250,000 investors on its platform by the end of 2021.
Plum’s CEO and co-founder, Victor Trokoudes, said: “Accounting for ESG when making investment decisions is not a new concept. The idea that investments can deliver good returns while benefiting the environment, society and the economy has been around for more than a decade. What’s really exciting for us here at Plum is we’re seeing a new generation of investors that consider ESG an essential part of their investment strategy. It’s not just a theory for them – they want to invest in the things that matter to them most and help to build a better world. As we start to move out of lockdown here in the UK, we feel this is a good sign that people are feeling optimistic about their financial future post-COVID.”