ESG inflows may be slowing but the party is not over

Regulation should increase uptake

Inflows into ESG funds may have decelerated recently, but the asset class’ long-term prospects are still strong.

According to our latest Fund Flow Index (FFI) figures, ESG funds in the UK suffered their second-worst month on record in March 2023, attracting just £219m, which is two-thirds less than the monthly average over the last three years. Inflows into ESG funds are slowing down for several reasons. Calastone: ESG equity funds suffer worst ever outflows in May Firstly, ESG funds did not deliver positive returns last year, with Bloomberg noting that the ten largest ESG funds by AUM reported double digit losses, with eight of them underperforming the S&P 500, which fell by 14.8%. Invest...