Morningstar on strong ESG fund flows and launches

Assets in U.S. sustainable funds have stayed on a steady growth trajectory.  As of March 2021, assets totaled nearly $266 billion.  That’s a 12% increase over the previous quarter and a 123% increase year over year.  Active funds retained the majority (60%) of assets, but their market share is shrinking.  Three years ago, active funds held 82% of all U.S. sustainable assets. 

As U.S. flows into sustainable funds have gained traction, asset managers have responded by growing their sustainable fund lineups.  In the first quarter of 2021, 11 funds were launched in the U.S. with sustainability mandates.  Of those 11, 10 were equity funds, and eight were exchange-traded funds.  Once again, most of the new sustainable funds available in the U.S. are actively managed offerings.  Two of the new funds target hydrogen power, an emerging focus for renewable energy investors: Direxion Hydrogen ETF (HJEN) and Defiance New Gen H2 ETF (HDRO).

~ Allyssa Stankiewicz, "Sustainable Fund Flows Reach New Heights in 2021’s First Quarter Green funds are blossoming this spring," Morningstar, April 30, 2021