ignites on SSGA ESG Liquid Reserves
Mutual fund industry news source ignites featured the article, "SSGA Latest to Go Green With Money Fund" earlier this week. They wrote, "SSGA last week launched the ESG Liquid Reserves Fund, which the Boston-based shop touts as 'the first fully ESG-focused money market fund.' The launch follows ESG-linked money fund rollouts from other providers including BlackRock and DWS. In April, BlackRock rolled out the Liquid Environmentally Aware Fund, which invests at least 80% of assets in holdings that meet its sustainability criteria and now represents $344.7 million. Meanwhile, DWS last year converted an existing money fund into the ESG Liquidity Fund, which 'takes into consideration' ESG factors in choosing securities, according to fund materials. That fund represents about $367 million in assets.... The SSGA product launch also follows the 2019 Global Cash Outlook piece that SSGA published earlier this year, which notes that running ESG cash strategies 'presents unique challenges due to investor expectations, regulatory requirements and the nature of the underlying assets.'" The piece quotes our Peter Crane, "You're very limited in how much ESG you can actually get.... It's a thing now [ESG money funds]. There's no doubt about it." The ignites article adds, "Despite the buzz, ESG money funds are unlikely to attract assets quickly, says Neal Epstein, VP in the funds and asset management group at Moody's Investor Service. Corporate treasurers and institutional investors tend to put other factors first -- namely, liquidity and safety, and then yield -- in choosing money funds, he says.... In all, State Street's money fund assets represented about $92 billion as of the end of May, making it the 13th-largest provider of such products, after Northern Trust ($113 billion) and Morgan Stanley ($118 billion), according to Crane Data." (See Crane Data's July 3 News, "SSGA Goes Live with ESG Money Market Fund.")
