Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. sustainable funds mark rare outflow in May

Stock Markets Jun 16, 2022 02:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Solar panels made by First Solar are seen during a tour of the Overland Park Solar Array in Toledo, Ohio, U.S., October 5, 2021. REUTERS/Dane Rhys/File Photo

By Ross Kerber

(Reuters) - Investors in May pulled $3.5 billion from U.S. mutual funds using environmental, social and governance (ESG) factors, researcher Morningstar Inc said on Thursday, a break with years of net new deposits.

Monthly momentum for what Morningstar terms "sustainable" funds has waned since January 2021 when inflows peaked at $10.3 billion.

But the May number marked the first net withdrawals since the $266 million taken out of the funds in December 2018, the first month Morningstar kept track of funds including those seeking to limit their ESG risks or those looking for ESG opportunities.

Most sustainable funds are equity funds, leaving them vulnerable to ongoing share price declines, said Jon Hale, Morningstar director of sustainability research.

"The market is the factor driving outflows. It will turn around once the market turns around," Hale said.

Investors pulled a total of $39 billion from long-term U.S. mutual funds and ETFs in May, following $94 billion in net withdrawals in April. It was the first two-month stretch of overall fund outflows since the end of 2018, Morningstar said.

ESG investing faces pressures including scrutiny from U.S. regulators about how the funds are advertised, and pushback from some Republicans who say they take too much account of policy issues. Hale said he expects forthcoming SEC disclosure rules should help investors understand ESG funds better.

Last year investors put a record $69.2 billion of net new deposits into sustainable funds, a 35% increase over the previous record in 2020, according to earlier Morningstar data, as investors focused on issues like climate change and workforce diversity.

For the first five months of this year sustainable funds took in $7.5 billion, compared to $35 billion for the same period of 2021.

U.S. sustainable funds mark rare outflow in May
 

Related Articles

Daimler Truck to keep prices high, sees strong 2023
Daimler Truck to keep prices high, sees strong 2023 By Reuters - Aug 11, 2022

By Victoria Waldersee BERLIN (Reuters) -Daimler Truck will keep prices high even if certain costs begin to fall in order to compensate for lower margins since last year, the...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email