Sustainable AUM Falls by €1trn amid Article 9 Outflow and Market Volatility
- AUM: Sustainable funds’ AUM fell by circa €1trn over Q1, hit by a mixture of asset price falls and heavy outflows for article 9 funds.
- Asset class flows: Article 8 bond funds saw the largest inflows (€41.27bn), followed by MMFs (€36.66bn).
- Equity Europe was the best-selling sustainable equity classification, attracting €14.91bn.
- Equity US sustainable funds suffered the heaviest redemptions (-€4.02bn), despite net flows of €14.8bn to these funds overall.
Sustainable Asset Class Growth
Chart 1: Article 8 Fund Asset Class AUM, Q2 2023 to Q1 2025 (€trn)
Source: LSEG Lipper
Total article 8 assets fell over Q1 2025, from €8.03trn to €7.07trn. Article 8 equity funds are the largest by AUM, and fell to 83.5% of their Q4 2024 values, at €2.6trn. Money market fund AUM was virtually static, at €1.67trn. Bond funds were 88.7% of their values of the previous quarter, at €1.64trn. Mixed-assets funds’ AUM followed a similar trend down, to 84.7% of Q4 2025 values, at €958bn.
Further down the scale, real estate funds were down to 93.9% of their previous value, at €112bn, alternatives, at €95.3bn—the largest drop, at just 60.6% of their previous quarter’s value, “other” at €3.32bn, and commodities funds, at €1.57bn—the only asset class to see a meaningful rise in asset value, at 14.2%.
Chart 2: Article 9 Fund Asset Class AUM, Q2 2023 to Q1 2025 (€bn)
Source: LSEG Lipper
Article 9 funds are less than 4% of those of Article 8. Total Q1 assets were €251.1bn, from €344.89bn—a much heavier fall than for their lighter-green peers.
Equity fund assets are again the largest class, declining to 66.5% of their Q4 2024 values, to €155.91bn, with bonds falling to 95.8% of the previous quarter values, to €76.76bn.
Other asset classes are considerably smaller: mixed assets (€13.24bn); alternatives (€3.35bn); money market funds (€1.33bn); and other (€501m). Apart from MMFs, which saw a 15% expansion, all the above contracted by at least a third over the quarter.
It looks to have been the worst quarter on record for sustainable fund assets, particularly for the “darker green” article 9 funds. Falls in asset valuations have taken their toll across the board, although article 9 funds have been hit by significant redemptions. Lipper Research has also noted a decrease in funds with sustainably themed names over the period, which may also be impacting on total asset values.
Sustainable Asset by AUM
Chart 3: Article 8 quarterly flows, Q2 2023 to Q1 2025 (€bn)
Source: LSEG Lipper
Total article 8 flows for Q1 2025 were €80.44bn, down from €107.17bn the previous quarter. Bond funds saw the largest inflows (€41.27bn), followed by MMFs (€36.66bn).
Some way behind, alternatives netted €3.02bn, while mixed assets took €1.35bn, with other (€52m) and commodity funds (€57m) moving the dial slightly.
Meanwhile, real estate suffered heavy outflows (-€1.84bn), with equity funds also in the red (-€141m).
Chart 4: Article 9 quarterly flows, Q2 2023 to Q1 2025 (€bn)
Source: LSEG Lipper
Article 9 funds haven’t had a positive quarter since Q3 2023. The first quarter of 2025 saw overall outflows for the classification of €7.68bn, or 2.2% of the Q4 2024 assets.
Worst hit were equity funds, with outflows of €7.73bn, followed by mixed assets (-€757m) and other funds
(-€35m).
On the positive side of the equation, bond funds took €661m, MMFs €173m, and alternatives €15m.
Net flows of articles 8 and 9 funds for the quarter were €72.76bn, with bond funds faring best. Equity funds fared badly, dragged down by the worst outflows from the classification’s equity funds since Q1 2024.
Sustainable versus Conventional Flows
Chart 5: Asset Class Flows, Articles 8 and 9 v Conventional, Q1 2025 (€bn)
Source: LSEG Lipper
Excluding MMFs, article 8 funds netted €43.77bn for the quarter, while article 9 funds shed €7.85bn.
While conventional equity funds attracted €72.55bn, their article 8 peers saw outflows of €141.48bn, dwarfed in turn by the €7.73bn from article 9.
Article 8 funds took the lion’s share of MMF flows, netting €36.66bn of the €45.84 total.
Article 8 bond funds’ take of €41.27bn exceeded conventional bond funds’ €26.57bn, with their article 9 peers attracting €661bn.
Mixed-assets total flows of €10bn breaks down to: conventional (€9.61bn), article 8 (€1.35bn), and article 9
(-€757m).
Alternatives funds total flows were €415m, which breaks down to: conventional (-€2.62bn), article 8 (€3.02bn), and article 9 (€15m).
Lastly, article 8 funds bore the brunt of the €2.9bn outflows from real estate funds, with the classification losing €1.84bn.
Sustainable Flows by Classification
Chart 6: Largest Positive Article 8 and 9 Flows by LSEG Lipper Global Classification, Q1 2025 (€bn) Versus Conventional Equivalents
Source: LSEG Lipper
Despite bonds being the quarter’s most popular asset class, two money market classifications top chart 6: Money Market USD (€16.94bn of articles 8 and 9 flows/€5.56bn conventional/€5.56bn conventional), and Money Market EUR (€10.1bn/€11.21bn respectively). Investors were piling into USD MMFs over the first two months of the year, but as the dollar weakened over March, this has reversed, with the classification going into the red.
Bond Other fund sales were almost entirely down to article 8, which netted €7.7bn, while Target Maturity Bond EUR 2020+ sales were split €7.41bn/€5.85bn, article 8 to conventional.
With investors beginning to seek alternatives to US equities, it’s not surprising to see Equity Europe as the best-selling sustainable equity classification, attracting €14.91bn: article 8, €6.37bn; article 9, €466m; and conventional, €8.01bn. The only other equity incumbent in the table is Equity Sweden (€2.91bn/€549m).
Chart 7: Largest Negative Article 8 and 9 Flows by LSEG Lipper Global Classification, Q1 2025 (€bn) Versus Conventional Equivalents
Source: LSEG Lipper
While Equity US netted €14.8bn for the quarter in total, it has seen the largest outflows of sustainable assets (article 8, -€2.92bn; article 9, -€1.1bn).
Similarly, if less pronounced, while Equity Emerging Markets Global conventional funds attracted €994m, their article 8 and 9 peers shed €2.29bn and €237m, respectively.
Equity Theme – Alternative Energy funds continue their negative run, losing €603m for article 8 funds and €1.45bn from article 9. These are capital-intensive industries, and performance was hit hard as rates spiked from 2022. Water utilities, represented by Equity Theme – Water (-€1.34bn for articles 8 and 9) is likely a similar story.
Tech has underperformed over Q1, although it’s hard at first pass to see why sustainable outflows from Equity Sector Information Tech (-€1.39bn) should particularly bear the brunt of this, as their conventional peers net €941m. However, €1.35bn of this is a redemption from one fund.
