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ESG investment fund withdrawals continue (2024)
| Environmental, social, and corporate governance |
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Withdrawals from ESG funds continued in the second quarter of 2024 according to data from Morningstar, meaning funds have shed more than they’ve taken in for nearly two years straight. But second-quarter losses were slower than in the first quarter. The largest funds continue to lose the greatest amounts:
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Investors pulled $4.7 billion from US sustainable funds in the second quarter of 2024, making it the seventh-consecutive quarter of outflows. These outflows, however, were half of those experienced in the first quarter, which amounted to almost $9 billion. … Although the motivations behind outflows cannot be precisely quantified, several key factors contribute to this trend. These include high interest rates, which have made alternative investment options more appealing and diminish the attractiveness of sustainable funds. Additionally, the mediocre returns of sustainable funds in 2023 have led to investor dissatisfaction and subsequent withdrawals. Concerns about greenwashing have also contributed to reduced investor confidence, as skepticism grows regarding the genuine sustainability credentials of some funds. Furthermore, the increasing politicization and regulatory scrutiny of ESG investing have prompted some investors to reevaluate their positions, resulting in further outflows. … Topping the outflows table was Parnassus Core Equity Fund PRBLX, with redemptions of $758 million. Long known as the largest US sustainable fund, Parnassus Core Equity has been one of the 10 biggest losers in terms of redemptions for more than two years straight, shedding more than $5 billion over that period.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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