UK sustainable funds recorded net inflows of £173m in the second quarter of 2026, ending five consecutive quarters of net redemptions.
The return to positive flows followed redemptions of £610m in Q1 2026, marking a quarter-on-quarter improvement of £783m.
According to the latest Lipper UK sustainable fund market report for the first half of the year, fixed income strategies drove the return to positive territory. Bonds led second-quarter sustainable inflows, attracting £604m, while equities remained the largest drag on the sector with outflows of £452m.
Money market funds added £147m, alternatives £61m and real estate £48m, the report said.
Within equities, global small and mid cap strategies led Q2 flows by gathering £308m. US equities recorded the largest sustainable outflows for the quarter, shedding £217m.
For the first half of 2026 overall, global corporate debt was the leading asset gatherer.The Bond Global Corporates GBP classification led H1 inflows with £1.26bn.
In contrast, domestic corporate debt saw the highest level of withdrawals, with Bond GBP Corporates acting as the largest detractor after shedding £717m.
It comes after global sustainable funds pulled in $3.7bn net inflows in the second quarter of this year, continuing a modest rebound.
Read more: Sustainable funds continue rebound in Q2 with $3.7bn inflows
