Appetite for Sustainable Funds Despite Headwinds

Global sustainable funds have attracted US$22.5 billion in new investment in Q3 and “held up better” than the broader market in a time of global crises, inflationary pressures and ongoing geopolitical tensions. The latest quarterly ‘Global Sustainable Fun Flows’ report, published by data provider Morningstar, has outlined recent activity in the global sustainable fund universe, detailing regional flows, assets, and launches for Q3 2022. Although assets in global sustainable funds fell to US$2.24 trillion as of the end of September, which is less than the estimated US$2.28 trillion in June, Morningstar noted that this 1.6% drop is less severe than the 7.5% decline demonstrated by the broader market. Hortense Bioy, Morningstar’s Global Director of Sustainability Research, said: “Not only has it been a turbulent year for all investors, but a trying one also for sustainability-focused investors who’ve had to deal with being underweight in fossil fuel companies, greenwashing concerns, and growing politisation of ESG in the US. So far this year, flows into sustainable funds have proven more resilient than those into traditional funds.”

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