Environmental, Social and Governance-related ETFs are more popular in Europe than in the US, according to a research company.
Deborah Fuhr, managing partner of ETFGI, said that 70 per cent of the world's $5.32 trillion (£4.16 trillion) ETF assets are domiciled in the US.
But 60 per cent of the ESG ETF assets are domiciled in Europe.
She said: "Europe are investing along these lines along these lines a lot more than people in the US, partly because of regulatory guidelines from countries like France and Belgium."
Pension funds are investing more heavily into ESG-focused ETFs because they support the way that these funds operate around diversity.
Ms Fuhr said: "Part of it is that the trend has moved away from avoiding the sin stocks such as tobacco farms and pornography - the stocks performed quite well."
She said stocks are chosen for their diversity, "and these companies do tend to perform better than companies that aren't rated highly on ESG factors.
"The data shows that stocks that are more diverse perform better."
According to ETFGI, assets invested in the Global ETF/ETP industry have decreased by 4.6 per cent, from US$5.57 trillion at the end of April, to US$5.32 trillion, according to ETFGI's May 2019 Global ETF and ETP industry landscape insights report
Investors may be looking for ETFs that have a high ESG ranking, as opposed to active funds because they are easily traded, are more transparent and have low charges.
Ms Fuhr said: "What happened with Woodford demonstrates that people don't like to have their investments gated and pay high fees.
"ETFs don't have these high fees."
