Sustainable Fund Flows Turn Negative for First Time in Q4 as Equities Dive Asset Class: Q4 saw net outflows of £2.24bn, driven by large redemptions from equity funds of £3.54bn—the first ever quarter of negative net flows. Classification: Equity US was the year’s best-selling sustainable classification, with inflows of £13.5bn, exceeding the entire annual take for sustainable equities. Active v Passive: In 2024, sustainable passive bond funds attracted £1.84bn with £1.59bn to active, while passive equities took £3.37bn and active £8.68bn. Fund manager: BlackRock enjoyed the highest sales of sustainable funds in 2024, with inflows of £20.55bn, overwhelmingly to equities.

Sustainable Bonds and Mixed Assets in the Red Over Q3 as Equity Increases Asset Class: Sustainable funds took £14.93bn over Q1-3 2024, compared to conventional funds outflows of £7.46bn, with sustainable equities netting £13.68bn. Classification: Equity US is the best-selling sustainable classification, with inflows of £13.5bn YTD. Conventional flows over the period were a more modest £1.6bn. Active v Passive: Passive bond redemptions for Q3 stood at £757m, as active bond funds saw inflows of £90m for the quarter. Fund manager: BlackRock saw inflows of £16.55bn, overwhelmingly to equities.   Note that this report has narrowed its focus from broad

Asset Class: Sustainable funds took £11.01bn over H1 2024, compared to conventional funds outflows of £6.63bn, with sustainable equities netting £8.71bn. Classification: Equity US funds were the most popular sustainable classification, netting £9.38bn, followed by Bond Global Corporates LC and Equity Europe ex UK. Active v Passive: Sustainable equity flows over H1 were £3.64bn to passive funds and £5.07bn to active. Fund manager: BlackRock saw inflows of £11.61bn, overwhelmingly to equities.   Sustainable versus Conventional Assets and Flows by Asset Class  Chart 1: Sustainable Asset Class AUM, 2014 to H1 2024 (£bn) Source: LSEG Lipper   Since 2014, UK sustainable

Asset Class: Sustainable funds took £7.63bn over Q1 2024 compared to outflows of £9.76bn for conventional funds, with the strongest flows to equity funds (£6.1bn). Classification: Equity US funds were the most popular sustainable classification, netting £5.8bn, followed by Bond Global Corporates LC and Equity Europe ex UK. Active v Passive: Index-tracking sustainable bond funds took 61.36% of sustainable bond flows over the quarter—a significant increase over 2023. Fund manager: BlackRock saw inflows of £8.27bn, overwhelmingly to equities.   Sustainable versus Conventional Flows by Asset Class Chart 1: Asset Class Flows, ESG v Conventional, Q1 2024 (£bn) Source: LSEG Lipper

Asset Class: Sustainable funds took £15.26bn over the year compared to outflows of £72.18bn for conventional funds (-£31.9bn excluding money market funds). Classification: Equity Global funds were the most popular sustainable classification, netting £6.29bn, followed by US and emerging market equity. Global funds saw the strongest flows for Q4, at £1bn. Performance: Global, US, and EM sustainable equity funds underperformed their conventional peers over 12 months and three years. Fund manager: BlackRock saw inflows of £11.31bn, overwhelmingly to equity funds.   Note that this report has narrowed its focus from broad ESG funds—those which indicate some form of ESG strategy

Asset Class: Most sustainable asset classes were in the black—with equities taking £9.62bn—except mixed-assets, which saw modest outflows of £75m. Classification: Equity Global funds were the most popular sustainable classification, netting £5.17bn, followed by US and emerging market equity. US funds saw the strongest flows for Q3. Performance: Global, US, and EM sustainable equity funds underperformed their conventional peers over 12 months despite the recovery of growth over the period. Fund manager: BlackRock saw inflows of £8.73bn, overwhelmingly to equity funds.     Note that this report has narrowed its focus from broad ESG funds—those which indicate some form of

  Asset Class: Most sustainable asset classes were in the black—with equities taking £10.28bn—except bonds, which saw outflows of £653m. Classification: Equity Global funds were the most popular sustainable classification, netting £4.57bn, followed by US and emerging market equity. Active v Passive: Despite more than £10bn of inflows for passive bonds over H1, passive sustainable funds shed £416m. Fund manager: BlackRock saw inflows of £6.64bn, overwhelmingly to equity funds.     Note that this report has narrowed its focus from broad ESG funds—those which indicate some form of ESG strategy in their fund documentation—to a smaller set of sustainable funds,

Asset Class: Long-term sustainable funds attracted £4.11bn in Q1 2023, £3.81bn to equity funds, as their conventional peers took in £2.58bn. Classification: Equity Global funds were the most popular sustainable classification, netting £2.34bn, followed by US and emerging market equity. Active v Passive: Sustainable funds took more than half of passive fixed income flows despite comprising only about 10% of the market by AUM. Fund manager: BlackRock saw inflows of £3.5bn, of which £3.02bn was in equity funds.   ESG v Conventional Flows by Asset Class Chart 1: Asset Class Flows, ESG v Conventional, Q1 2023 (£bn) Source: Refinitiv Lipper

Refinitiv Lipper’s analysis of environmental, social, and governance (ESG) investments in the UK market Last year tested the resilience of ESG investing, as the growth and tech assets that were the mainstay of many “sustainable” portfolios looked anything but, and oil and gas led the market. Given this, and the rising (and, indeed, justified) concern over greenwashing, concern over the future of sustainable investing grew. Google “death of ESG” and you get a plethora of articles in the financial press, especially over the summer. But, to paraphrase the hoary old Mark Twain quote, reports of ESG’s death have been much

Refinitiv Lipper’s analysis of environmental, social, and governance (ESG) investments in the UK market.   Over the first three quarters of the year, equity, bond, and mixed-assets funds have resisted the negative flows that have beset their conventional peers. However, a waning tide will eventually see all boats lower, and that’s what we have seen in Q3, as flows went negative for ESG equities and bonds, with only mixed assets managing to keep a toehold in positive territory. For equities, this seems to be less of a disenchantment with ESG per se, but rather a function of investors withdrawing money

Refinitiv Lipper’s analysis of environmental, social, and governance (ESG) investments in the UK market.   Negative performance across most markets is translating into negative sentiment, with net redemptions in long-term assets running to £49.9bn for the first six months of the year—£15.6bn of that coming out of equity funds. However, ESG flows look resilient so far, with net flows for long-term assets employing such strategies standing at £16.6bn—£11.3bn of that to ESG equity funds (p4). As we noted in the previous quarter’s report, this is despite the erosion of the performance premium that’s been enjoyed by top-selling ESG sectors over

Passive bond sales are a rare venture into the black, as equities see almost £7bn redemptions.   Asset Class View Gross redemptions for the month were £10.5bn, with the biggest outflows from equity vehicles. Only net inflow at the asset class level was for Real Estate, with £252m. Active v Passive Active to passive bond sales mirrored one another, with approximately £1.4bn outflows from the former and into the latter. ETFs took £906m over the month, as passive mutual funds saw outflows of £1.3bn, with £2.8bn of redemptions from passive equity mutual funds. Classifications Bond classification, led by GBP Government,