• Our recently published FUSE Data Snapshot ESG Products shows the continued trend of increasing outflows among environment, social, and governance (ESG) products.
• Through the first half of 2023, net outflows from U.S. ESG/Sustainable open-end funds and ETFs totaled more than $5.5 billion, marking the first time over the prior five-year period that overall net flows fell into negative territory.
• ESG flows have slowed, but the business world’s pivot towards ESG has not. According to Deloitte’s 2022 Sustainability action report, 99% of corporations are actively or willing to “invest in new technologies and tools in order” to be aligned with new ESG expectations and rules.
• We believe more promising growth will come from a more personalized basis at the individual investor level with products such as separately managed accounts, direct indexing, unified managed accounts, and select actively managed funds.

U.S. ESG/Sustainable Long-Term Open-End Funds and ETF Net Flows ($M)

Note: Excludes money market funds and fund-of-funds
Source: Morningstar, FUSE Research Network