Assets in iShares ESG fund plummets by 91% after top investor Ilmarinen’s exit

According to public data, the iShares of ESG MSCI EM Leaders ETF saw heavy outflows this week, leading to a tenfold drop in the assets managed by the ETF focused on sustainable emerging-market companies.

In September, Finland’s Ilmarinen Mutual Pension Insurance Company owned 13 million shares in the ETF making it the top investor in the fund at that time.

According to Juha Venalainen, a senior portfolio manager at Ilmarinen, Ilmarinen has significantly reduced its holdings in the ETF.

“We decided to reduce our exposure to equities in emerging markets. Our view is that risks in that area may have increased,” said Venalainen while adding, the transaction decreased capital in the fund.

“We are by no means disappointed with the ETF, the decision was purely allocative,” said Venalainen.

The number of outstanding shares in the fund, which has underperformed its benchmark and whose top three holdings are Taiwan Semi, Tencent and Alibaba, fell by more than 91% to 1.2 million from 13.9 million as of December 22.

The ETF now manages assets worth around $74 million worth of net assets, compared to ten times more earlier this month.

BlackRock, the world’s biggest asset manager which owns iShares, did not immediately respond to requests for comments.



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