Part of the mutual fund world brought in more inflows in the first seven months of the year than in all of 2019.

That's one tidbit found in Morningstar's new Global Sustainable Fund Flows: Q3 2020 in Review report, released this week. The report was penned by eight M* analysts, including Jon Hale (director of sustainability research) and Ian Tam (director of investment research in Canada) here in North America. The report counts open-end mutual fund and ETFs using sustainability objectives or "binding ESG criteria for their investment selection": funds with limited exclusionary screens or non-determinative ESG consideration integration are not covered. Funds of funds, feeder funders, and money market funds are also excluded.

Per the report, by the end of Q3 2020, sustainable funds in the U.S. had netted $30.7 billion in year-to-date inflows. (That's 43 percent higher than their record net inflows of $21.4 billion for all of 2019: 2020 inflows passed 2019 inflows in July.) They brought in $9.8 billion in Q3 2020 alone, and AUM rose about 13 percent in the quarter to $179 billion on September 30. Total fund launches reached a record 53 YTD.

Active funds still account for a majority of the total AUM in sustainable funds. Yet passive funds have accounted for 71 percent of net YTD inflows into U.S. sustainable funds, and 63 percent of net Q3 sustainable fund inflows. 

Edited by: Neil Anderson, Managing Editor


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