Aug 15 (Reuters) - Investors deposited $120 million into
U.S. sustainable funds last month, a "tepid" amount of inflows
that coincided with a broader retreat from mutual funds and
ETFs, researcher Morningstar Inc said on Monday.
July marked the second consecutive month of net new deposits
for sustainable funds, though they gathered considerably less
than the $492 million notched in June, according to the firm's
Funds termed "sustainable" by Morningstar include those
which integrate environmental, social and corporate governance
(ESG) factors into their investment processes.
While "demand for sustainable funds remained tepid in July,"
Morningstar said in the report that "their recent weakness isn't
surprising as investor appetite has soured across the board."
Investors withdrew $13 billion overall from U.S. long-term
mutual funds and ETFs in July, the fourth month in a row of
outflows, according to Morningstar.
It is the longest streak of net withdrawals since
Morningstar began tracking the data in 1993, as investors
contend with stock market volatility and concerns about
inflation and interest rate hikes.
After a bumper year in 2021, funds which consider ESG
criteria struggled during the market sell-off earlier this year,
with widespread underperformance and softer demand.
Sustainable funds took in $8.9 billion during the first
seven months of the year, a sharp drop from the $45.1 billion
they attracted during the same period in 2021, Morningstar said.
These funds gained new prominence last year as extreme
weather, events highlighting social injustice, and shareholder
activism brought ESG issues to the top of the agenda of
(Reporting by Cole Horton in New York; Editing by Aurora