Key takeaways for 1H 2026

AUM in Sustainable funds grew to over $4 trillion

Assets under management (AUM) in Sustainable funds globally reached a new high of $4.24 trillion at the end of June 2026 according to Morningstar data. This was up 4.8% on December 2025, mostly driven by fund performance. Sustainable funds now make up 6.1% of total AUM, down from a high of 7.2% in June 2023 as Traditional funds have consistently recorded stronger net inflows over that period.

Sustainable funds outperformed Traditional peers, driven by strong equity fund performance

The median return for Sustainable funds was +4.9% for 1H 2026, outperforming Traditional funds at +4.0%. Greater exposure to equities was the key driver of outperformance: The median Sustainable equity fund return was +9.0% in the first half of the year, just ahead of +8.6% for Traditional peers, which more than offset -1.3% for Sustainable fixed income funds, underperforming Traditional fixed income funds at +1.3%. Sustainable funds had stronger median returns than Traditional peers in all four major regions, with outperformance greatest in Americas and APAC investment areas.

Inflows to Sustainable funds in 1H 2026, although still below the rate of Traditional funds

First half inflows to Sustainable funds were $37.7 billion, or +0.9% of prior year-end AUM, with momentum stronger in the first quarter and slowing in the second. By fund domicile, Europe funds drove the first quarter inflows. North America flows turned positive in the second quarter, but Asia recorded outflows in both quarters. Traditional funds continue to record stronger flows, at +2.5% of prior year end AUM in 1H 2026.

Read Morgan Stanley’s Sustainable Reality report for 1H 2026 here.

Ed’s note: EBnet’s series Heatwave Horizons sponsored by Sanlam Corporate, explores the Actuarial Society of South Africa’s (ASSA) groundbreaking work and intellectual property in climate risk management. Watch it here.

ENDS