Sustainable fund inflows hit $6.5 billion as U.S. turns negative

Global sustainable funds took in $6.5 billion in the third quarter of 2026, their third consecutive quarter of positive net flows and the strongest quarter since late 2024, according to a Morningstar report. Assets in the category fell 2.1% to $3.8 trillion over the same period as markets declined.

Europe drove the result. The region drew a net $9.4 billion, up from $3.7 billion in the prior quarter and its third consecutive quarter of positive flows. Passive strategies there attracted $10.8 billion while active strategies saw a fifth consecutive quarter of outflows at $1.4 billion. By asset class, fixed income funds drew $8.8 billion, equity funds added $2.2 billion, and allocation funds saw modest outflows, the report found.

For a selector screening sustainable managers on flows, that split changes what the screen identifies. Europe's passive sustainable strategies took in $10.8 billion while active strategies lost $1.4 billion, and U.S. outflows continued to be driven by active strategies, so a flow-ranked shortlist will favour the passive shelf in both regions rather than distinguishing between managers.

The U.S. turned negative again at $2.8 billion in outflows, after recording its first positive quarter since 2022 in the second quarter. Passive strategies in the U.S. posted a fourth consecutive quarter of inflows at $2.7 billion. Fixed income funds were positive at $1.1 billion, offset by $4.2 billion of outflows from equity funds.

Flows remain small against the asset base. The $6.5 billion of net inflows equals roughly 0.2% of the $3.8 trillion in global assets, and the 2.1% quarterly decline in assets implies market losses of a scale the inflows did not offset. Europe holds $3.2 trillion of the global total, or 84%, followed by the U.S. at 10%.

New launches kept falling. Europe produced three sustainable funds in the quarter, down from 16 in the second quarter, and most new fund activity was concentrated in China. No new sustainable funds launched in the U.S., Canada, Australia, New Zealand or Japan.