Article 8 funds saw inflows of EUR 38 billion in Q3 2024, the highest since the end of 2021 according to a new report by Morningstar Sustainalytics.
However, Article 6 funds saw inflows of EUR 96 billion in the last three months.
Other highlights of the report include:
• Redemptions from Article 9 funds continued for the fourth consecutive quarter as investors pulled EUR 2.2 billion out of these strategies. But this is much less than the previous outflows of EUR 6.5 billion.
• Actively managed Article 8 funds continued their flow recovery by garnering close to EUR 27 billion in the third quarter, the highest inflows recorded by these strategies in almost three years.
• Combined assets in Article 8 and Article 9 funds remain quasi-stable at EUR 6 trillion, accounting for almost 60% of the EU fund assets.
• Newly incepted Article 8 and Article 9 funds, although declining slightly, continue to represent more than half (56%) of the total number of funds launched in the EU.
• So far this year, 104 Article 8 and Article 9 funds have changed names, of which 42 added ESG-key terms, 42 dropped ESG-key terms, and 20 swapped ESG-key terms.
Hortense Bioy, head of sustainable investing research at Morningstar Sustainalytics, said, “In Q3 2024, Article 8 and Article 9 funds continued their flow recovery. But once again, like in the previous five quarters, investors favoured Article 6 funds. A worrying trend for this segment of the market is the continuously low interest in the darker green strategies, as represented by Article 9 funds and those Article 8 funds with high commitment levels to sustainable investments. This could be due to several reasons, including elevated interest rates which still plague green stocks, the uncertainty around the impact of anti-greenwashing rules on ESG strategies, as well as a general preference for mainstream exposures in the current macro and geopolitical environment. Despite all of this, Article 8 and Article 9 funds are maintaining their 60% share of the EU fund market.”
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