In the first six months of the year sustainable funds saw a return of 12.5%, against traditional funds of 9.2%, according to research by Morgan Stanley.

Assets under management in sustainable funds also grew to a new high of $3.92 trillion as of June 30, up 11.5% from December 2024, according to the Morgan Stanley Institute for Sustainable Investing.

After underperforming in the second half of 2024, sustainable funds generated median returns of 12.5% for 1H 2025, compared to traditional funds’ 9.2%, marking the strongest period of outperformance for sustainable funds since the Institute began tracking data in 2019.

Over a longer period, sustainable funds have outperformed traditional funds. Investing $100 into a sustainable fund in December 2018 would equate to $154 today, while investing $100 into a traditional fund over the same period would equate to $145 today, according to the Institute’s analysis of Morningstar data.

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