Global sustainable open-ended and exchange-traded funds (ETFs) attracted an estimated $4.3bn of new money in Q2, compared with restated outflows of $2.9bn in Q1, according to the latest statistics from Morningstar Sustainalytics.
Examining recent activity in the universe alongside details of regional flows, assets and launches, Morningstar Sustainalytics found that – supported by stock price appreciation – global sustainable fund assets stood steady at $3trn at the end of June 2024.
See also: Is ESG making a comeback or has it only just truly arrived?
European sustainable funds garnered $11.8bn, up from the restated inflows of $8.4bn in the previous quarter. Meanwhile, in the US, investors continued to pull money out of sustainable funds, but less than in the previous two quarters. Redemptions in the last quarter amounted to $4.7bn, about half of the $8.8bn registered in the first quarter.
There were reduced outflows in Japan too, despite sustainable funds in Asia continuing to attract net new money.
However, product development continued on a downward trajectory, with only 77 new sustainable fund launches in the second quarter of 2024. Morningstar Sustainalytics said that this confirms the normalisation of sustainable product development activity after three years of high growth, during which asset managers hastened to build their sustainable fund ranges to meet the growing investor demand.
“The picture for global ESG fund flows is starting to improve. We started the year with outflows, but this has since turned around, with money trickling back into the sector,” noted Hortense Bioy (pictured), head of sustainable investing research at Morningstar Sustainalytics
“European ESG funds have gathered more than $20bn so far this year. Across the pond, investor appetite for ESG funds remains subdued, with continued outflows, but these were smaller than what we saw in the previous two quarters.”
As the largest global manager, BlackRock continues to dominate the sustainable investing space, with over $370bn of assets in ESG-focused open-ended assets and ETFs. Behind BlackRock, Amundi (the largest European manager) reached $177bn, almost level with the previous quarter.
