Equity Global Funds See Heaviest Sustainable Outflows Throughout 2025
- Net flows: Sustainable flows posted their fourth consecutive negative quarter
(-£5.41bn). There had not been a negative quarter prior to 2025.
- Equities: Sustainable equity funds were the main source of redemptions over the quarter (-£5.65bn), albeit not as large as over Q3.
- Bond Global Corporates GBP was the most popular sustainable classification over Q4 (+£451m) despite £3.27bn of redemptions from conventional peers.
- Equity Global saw the largest redemptions in Q4 (-£3.8bn), as sustainable Equity US flows also tuned negative (-£891m)—a reversal from the previous quarter.
- SDR: Net aggregate redemptions to SDR funds YTD were £4.18bn, further down on Q3’s outflows of £3.77bn.
Note that this report has narrowed its focus from broad Sustainable funds—those which indicate some form of Sustainable strategy in their fund documentation—to a smaller set of sustainable funds, defined as all SFDR Article 9 funds plus Lipper Responsible Investment Attribute funds reduced to those containing indicative sustainable keywords in the fund name.
Sustainable Asset Class Growth
Chart 1: Sustainable Asset Class AUM, 2016 to 2025 (£bn)
Source: LSEG Lipper
UK sustainable assets held in mutual funds and ETFs rose from £233.16bn to £240.02bn over 2025 (2.94% up), while conventional UK mutual fund and ETF assets rose by 3.86%. Sustainable assets, as defined by Lipper, make up 9.38% of the UK mutual fund and ETF market.
Equity funds make up most sustainable assets, at 72.33%, followed by bond (13.45%), mixed assets (12.48%), and MMFs (1.23%). Alternatives and real estate funds make up less than 0.5% each of sustainable assets.
Equities have taken a greater market share over the past five years, particularly at the expense of mixed assets, then bonds. The respective proportions for 2020 were 61.67%, 24.95%, and 13.45%. However, all have grown in absolute terms.
Sustainable Asset Flows
Chart 2: Five-year quarterly flows, to Q4 2025 (£bn)
Source: LSEG Lipper
Sustainable flows posted their fourth consecutive negative quarter (-£5.41bn, somewhat recovering from Q3’s -£10.23bn), and the second worst ever quarter. As can be seen from chart 2, there hadn’t been a negative quarter over the period of analysis prior to 2025.
This was largely down large redemptions from sustainable equity funds (-£5.65bn). The previous quarter’s redemptions had been highly concentrated, and while this is the case for the current quarter (more than £2bn redeemed from two funds) outflows, though half the size of the previous quarter seem more broadly based.
Mixed assets (-£563m), MMFs (£54m), and real estate (-£1m) also saw redemptions. However, bond funds rebounded after two quarters in negative territory, attracting £842m, and sustainable commodity funds saw modest inflows of £4m.
Sustainable versus Conventional Flows by Asset Class
Chart 3: Asset Class Flows, Sustainable v Conventional, Q4 2025 (£bn)
Source: LSEG Lipper
Total sustainable net flows for the quarter were
-£5.41bn (-£4.85bn ex MMFs), with conventional flows being -£1.02bn and -£14.02bn ex MMFs, conventional MMF flows therefore flattering the latter’s aggregate.
As stated above, a decent quarter for sustainable bond funds (+£842m), with their conventional peers netting £2.77bn. Sustainable alternatives (+£11m/+£1.3bn conventional) and commodity funds (£4m/£73m conventional) were also in positive territory.
Sustainable MMFs (-£54m/+£12.92bn conventional) and mixed assets (-£563m//+£2.58bn conventional) stood out, as being in the red while their conventional equivalents took money. Sustainable equity outflows, although the largest (-£5.65bn), were in the same direction as conventional flows (-£20.46bn).
Chart 4: Asset Class Flows, Sustainable v Conventional, FY 2025 (£bn)
Source: LSEG Lipper
Total sustainable net flows for 2025 were -£16.32bn (-£15.54bn ex MMFs), compared to conventional flows of -£18.65bn and -£20.34bn, respectively.
MMFs’ £235m inflows were in the same direction as the £22.8bn for the asset class’s conventional flows, while sustainable real estate netted £58m despite the £1.34bn redemptions for conventional property. Sustainable commodity funds attracted £17m (+£737m conventional).
On the debit side of the ledger, sustainable alternatives shed £29m (+£2.69m conventional), bonds -£110m (-£483 conventional), and mixed assets -£797m (+£948m conventional). It’s therefore of note that sustainable alternatives and mixed assets are seeing outflows, as the broader market expands.
Sustainable equity’s Q4 outflow put 2025 flows at -£15.69bn (-£44bn conventional).
Sustainable Flows by Classification
Largest positive flows
Chart 5: Largest Positive Sustainable Flows by LSEG Lipper Global Classification, Q4 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
The top sustainable inflows in Q4 25 look very different to the previous quarter. In Q3 25, the most popular classifications were equity, despite redemptions from the asset class in aggregate. Six out of the top seven were equity. Q4 25 looks very different, with the top five all being bond classifications—all of which are Bond Global.
Bond Global Corporates GBP dominated (+£451m), despite £3.27bn redemptions from conventional peers. Bond Global Short Term followed (+£245m/ +£1.04bn conventional).
Equity Japan was the most popular equity classification, despite redemptions in aggregate (+£179m/-£1.28bn conventional), followed by Equity Sector Real Estate Global (+£171m) and Equity Emerging Markets Global (+£124m), with conventional equivalent for both also seeing redemptions.
Chart 6: Largest Positive Sustainable Flows by LSEG Lipper Global Classification, FY 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
Despite the rotation from quarter to quarter, full-year rankings for the top-five money-taking classifications remain the same: Equity US (+£5.43bn/-£18.53bn conventional); Equity Emerging Markets Global (+£1.68bn/-£241m conventional); Bond Global Corporates USD (+£1.23bn/-£804m conventional); Equity Europe ex UK (+£976m/-£2.37bn conventional); and Equity Japan (+£590m/-£4.69bn conventional).
What’s noteworthy here is that all classifications have seen redemptions from their conventional equivalents.
Largest negative flows
Chart 7: Largest Negative Sustainable Flows by LSEG Lipper Global Classification, Q4 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
Equity Global has its second consecutive quarter with the largest redemptions, albeit at a slower rate than in Q3 25, and this time with conventional equivalents also seeing outflows (-£3.8bn/-£6.31bn conventional).
Equity US goes from being the most popular sustainable classification in Q3 25 to the second most unpopular in Q4 25, with their conventional peers also seeing significant redemption (-£891m/-£4.54bn conventional).
Sustainable Equity UK also continues to suffer outflows, in line with conventional peers (-£444m/-£3.34bn). Equity Europe ex UK saw a reversal of fortunes over the quarter, in line with conventional peers, and despite outperformance over the year
(-£301m/-£783m conventional).
The non-equity sustainable classification that saw the largest outflows over the quarter was Bond Global High Yield USD (-£334m), despite positive flows for the classification’s conventional funds (+£758m).
Chart 8: Largest Negative Sustainable Flows by LSEG Lipper Global Classification, FY 2025 (£bn) Versus Conventional Equivalents
Source: LSEG Lipper
The largest redemption over FY 2025 remain unchanged from the first three quarters: Equity Global (-£19.63bn/+£9.73bn conventional); Equity Sector Real Estate Global (-£2.08bn/-£119m conventional); Bond GBP Corporates (-£1.72bn/-£1.82bn conventional); and Equity UK (-£1.71bn/-£14.71bn conventional).
The distinction between negative flows for sustainable Equity Global and positive for conventional is notable, and redemptions have been highly concentrated, with more than £11bn being pulled from one fund over the year.
It’s notable that Equity UK continues to suffer, whether sustainable or conventional, despite outperforming both Global and US over the course of the year. The reversal of fortunes for Equity US, however, wasn’t enough to propel it into the chart above for full-year redemptions.
Sustainable Mixed Asset Balanced funds, whether balanced or global in focus, also continue to see redemptions, as their conventional peers enjoy inflows.
Active versus Passive
Chart 9: Sustainable Bond (LHS) and Equity (RHS) Active v Passive Asset Class Flows, 10 Quarters to Q4 2025 (£bn)
Source: LSEG Lipper
Passive sustainable bond funds recovered from Q3’s redemptions to see inflows of £173m over Q4, as their active peer’s flows increased by about £100m, to take in £668m over the final quarter. Over the course of 2025, sustainable passive bond funds suffered redemptions of £804m, while their active peers netted £694m—in the same direction of travel as for active versus passive in the asset class overall.
Over Q4, while sustainable passive equity strategies saw modest inflows of £229m, their active peers suffered significant redemptions (-£5.88bn, further down on Q3’s -£4.47bn). Over the full year, those figures are -£6.14bn and -£9.55bn, respectively.
Flows by Asset Manager
Chart 10: Largest Positive Sustainable Flows by Promoter, FY 2025 (£bn)
Source: LSEG Lipper
Q4 25 sees HSBC and Legal & General swap places. HSBC tops the table over the full year (+£1.03bn), with £684m of sustainable equity (the highest), £227m of MMFs and £159m of bond inflows, with £36m of mixed-assets outflows.
Legal & General comes second (+£887m), buoyed by bond (+£495m), equity (£245m), and mixed assets (£147m).
BNP Paribas is the top-selling manager for sustainable bond funds over 2025 (+£516m).
SDR: AUM and Flows
Chart 11: SDR Categories AUM December 2025 (£bn)
Source: LSEG Lipper
LSEG Lipper records £29.34bn of assets in these funds, up on Q3’s £28.01bn, as market growth exceeded net redemptions: Sustainability Focus, £23.18bn (78.99%); Sustainability Impact, £2.6bn (8.86%); Sustainability Improvers, £2.67bn (9.08%); and Sustainability Mixed Goals, £0.9bn (3.07%).
Chart 12: SDR Categories Net Flows by Asset Class, FY 2025 (£bn)
Net aggregate redemptions to SDR funds YTD were £4.18bn, further down on Q3’s outflows of £3.77bn.
Sustainability Focus funds suffered worst, with outflows of £3.89bn (bonds -£214m; equity -£2.75bn; mixed assets -£927m). All asset classes within Sustainability Focus therefore suffered outflows over Q4.
Sustainability Impact funds saw net outflows of £1.1bn (bonds -£11m; equity
-£1.1bn; and real estate
-£15m).
Sustainability Improvers, however, recovered over the final quarter, with inflows of £791m (bond +£491; equity +£417m; mixed assets -£117m).
Sustainability Mixed Goals saw FY inflows of £21m, all to mixed asset funds.
