After years of watching passive funds eat their lunch, active asset managers have been licking their lips since the onset of the pandemic. They reckoned that more volatile markets would enable them to outperform and that the crisis would give another push to sustainable investing where they are assumed to have an edge over index funds.

Three months in, they find plenty of reasons to be cheerful. The markets have bounced back and fund flows have been surprisingly robust. Funds that take account of environmental, social and governance (ESG) factors have generally beaten rivals with no sustainability focus. And European policymakers are pursuing a climate change agenda that can only increase the trend towards ESG investing.