Sustainalytics Insight: Record outflows to global sustainable funds.
Global sustainable open-end and exchange-traded funds experienced record outflows in the first quarter of 2025, according to the Morningstar Sustainalytics quarterly global sustainable fund flows report.
Investors withdrew an estimated $8.6 billion USD in the first quarter, reversing the $18.1 billion USD in inflows experienced in the previous quarter. On the negative side, the US extended its streak of quarterly outflows to 10 while Europe suffered its first quarter of net outflows since at least 2018 and Asia also experienced net outflows. Meanwhile, Canada and Australia / New Zealand attracted new flows in the first quarter.
Hortense Bioy, Head of Sustainable Investing Research, Morningstar Sustainalytics
“It has been a perfect storm in the global markets in recent months, particularly when it comes to sustainable investing. An increasingly complex geopolitical environment, including the return of Donald Trump to the White House, and new anti-ESG policy measures have prompted asset managers in the US, many with global operations, to adopt a more cautious stance. In Europe, an evolving regulatory agenda and re-shaping of the sustainable funds landscape – particularly in sectors such as clean energy – are weighing on investor sustainability strategies.”
To speak in more detail with Hortense, reach out to Tim Benedict at [email protected] or (203) 339-1912.
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