Sustainable Funds Falter in Q2 – Morningstar

Data and analytics provider Morningstar’s ‘Global Sustainable Fund Flows’ report for Q2 2023 found that sustainable funds attracted US$18 billion of net new money, down from US$31 billion in the previous quarter. Despite what Morningstar termed a “challenging macro backdrop”, European sustainable funds garnered US$20 billion of net new money, although this marks a decline from nearly US$34 billion in the previous quarter. In the US, sustainable funds generated US$635 million for investors, which showed a slight recovery from losses of up to US$5 billion across the two previous quarters. In Canada, net inflows slipped significantly from US$963 million in Q1 to US$207 million this quarter, while Asia – excluding Japan – saw US$172 million of net new money invested in the space. In spite of these lower net inflows, global sustainable fund assets inched higher and hit nearly US$2.8 trillion at the end of June. Europe accounts for the majority of the sustainable fund landscape with 84% of global sustainable fund assets, with climate remaining a popular theme in the region. During Q2, 18 new climate-related funds launched in Europe, including climate transition and green bond strategies.  

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