Global sustainable funds attracted US$32.6 billion of net new money in the second quarter of 2022, representing a fall of 62% relative to the revised US$87 billion of inflows in the first quarter, according to Morningstar’s Global Sustainable Fund Flows report for Q2 2022.
“Amid investor concerns over a global recession, inflationary pressures, rising interest rates, and the conflict in Ukraine, sustainable funds net inflows plummeted in the second quarter, fared better than the broader market.”
On the inflows, the report said that net inflows of USD 929 million into sustainable funds were recorded during the second quarter of 2022.
It said that this was lower than the USD 1,271 million in net inflows in the first-quarter of 2022. Sustainable fund flows in Taiwan continued to be the highest in the region, reaching USD 911 million over the second quarter.
It was followed by Hong Kong’s USD 129 million inflows. By contrast, South Korea, India, and Indonesia experienced net outflows over the quarter.
On China, the report said that China saw USD 1,398 million of net outflows in the second quarter, versus net inflows of USD 208 million a quarter earlier. Environmental sector funds saw large outflows of USD 1,055 million, which might be due to market turbulence as well as investors realizing profits as the market bounced back in May and June.
Commenting on the series of new carbon-neutrality ETFs recently launched in China, Jackie Choy, Morningstar’s Director of ETF, Asia, remarked: “ETFs have been a popular channel for asset managers to put forth the ESG/thematic ideas to reach investors in China, and the popularity of funds of specific themes has been influenced by the Chinese government’s commitment to pursue economic transformation.