US sustainable funds returned to inflows in June, report says

Investors resumed deposits into US sustainable funds last month, marking a return to the norm after net withdrawals in May broke a three-year streak of monthly inflows, researcher Morningstar said on Monday, reports Reuters.
Sustainable mutual funds and ETFs, including those using environmental, social and governance (ESG) factors, notched a "modest" $528 million of net new deposits in June after shedding $3.2 billion the month prior, according to Morningstar's latest figures.
"Investors may have turned back to ESG and renewable energy, thinking that the worst of the downturn was already priced in," said Alyssa Stankiewicz, Morningstar's associate director of sustainability research.
Investors' ESG commitments have been tested this year by the onset of a bear market, driven by rising interest rates and concerns over a potential recession, as well as underperformance by US sustainable funds.
Indeed, the positive flows in June could not reverse a marked slowdown in momentum for sustainable funds during the first half of the year.