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Global Sustainable Fund Flows: Q3 2024 in Review
The flow recovery continues but remains timid.
Key Takeaways
In the third quarter of 2024, the global universe of sustainable open-end and exchange-traded funds attracted an estimated USD 10.4 billion of net new money, a notable uptick from the restated inflows of USD 6.3 billion in the second quarter.
European sustainable funds garnered almost USD 10.3 billion, slightly down from the restated USD 11.1 billion in the previous quarter.
Analysts expect changes to the universe of sustainable funds to intensify in the coming months ahead of looming deadlines for new anti-greenwashing regulations, including the EU's fund naming rules.
The Global Sustainable Fund Universe
The flow recovery of the global universe of sustainable funds extended to the third quarter of 2024, netting USD 10.4 billion, compared with the restated USD 6.3 billion inflows in the previous quarter. The recovery mainly benefited from the decelerated outflows in the US, Japan, and Canada, while Europe registered slightly lower inflows than the previous quarter.
Download the report here from the Morningstar Manager Research team for a comprehensive overview of the third quarter of 2024.
European Sustainable Fund Flows Continue Their Downward Trend
European-domiciled sustainable funds garnered USD 10.3 billion in the third quarter of 2024, falling short of the restated inflows of USD 11.1 billion in the second quarter and the restated inflows of USD 16.0 billion in the first quarter of 2024. In the first nine months of the year, European sustainable funds garnered just over USD 37 billion compared with USD 73 billion in the first nine months of 2023.
The minor decrease in inflows in the European sustainable fund universe translated into a lower organic growth rate of just under 0.40% from the 0.43% of the previous quarter. This flow deceleration compares unfavorably to the increased organic growth rate of 0.67% for the conventional fund universe, which garnered over USD 122 billion, up from the restated USD 85 billion in the previous quarter.
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Sustainable Funds Rebranding
For the year to date through September, 113 European sustainable funds have changed names, of which 43 added ESG-key terms, 50 dropped ESG-key terms, and 20 swapped ESG-key terms.
We expect an acceleration of rebranding activity among sustainable funds over the next six months as asset managers marketing products in the EU are required to comply with the European Securities and Markets Authority's guidelines on ESG funds' names. They have until May 2025 to do so. The guidelines aim to protect investors against greenwashing risk and provide minimum standards for funds available for sale in the EU that use specific ESG terms in their names. Last May, we identified around 4,300 EU funds with ESG or sustainability-related terms in their names that may fall within the scope of the guidelines.
BlackRock tops the league assets table
Below, we list the top asset managers marketing sustainable funds globally. BlackRock, the world's largest manager, dominates the sustainable investing space, with over USD 423 billion of assets in environmental, social, and governance-focused open-end funds and ETFs. UBS was a distant second with a total AUM of USD 192 billion, closely followed by Amundi's USD 187 billion.
Get more specific and detailed information about global sustainable fund flows from the most recent quarterly free report, from which this article was adapted. There are many more charts and tables to pore over.
Additional topics include:
- Sustainable Fund Launches and Closures
- Leaders and Laggards
- Quarterly Statistics Per Domicile
- Regulatory Updates
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