2026 H1 Global Sustainable Fund Report
Morgan Stanley Institute for Sustainable Investing releases 2026 H1 global sustainable fund report, aimed at summarizing the development of sustainable funds.
This report is based on the Morningstar database, tracking the asset size, fund flow, and performance of approximately 100,000 funds worldwide, and systematically comparing sustainable funds with traditional funds.
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Scale and Flow of Global Sustainable Fund
Since 2022, the asset size of sustainable funds has steadily increased at a rate of 6.2% every six months. As of June 2026, the global sustainable fund AUM has reached a historic high of $4.24 trillion, an increase of 4.8% compared to the end of 2025, mainly due to good fund performance. Despite the continuous growth of asset size, the proportion of sustainable funds in the total assets of global funds has decreased from a peak of 7.2% in December 2023 to 6.1%.
In the first half of 2026, sustainable funds recorded a net inflow of $37.7 billion, with $33.5 billion in the first quarter and $4.2 billion in the second quarter. The European sustainable funds recorded an inflow of $43.9 billion, accounting for 87%. US funds recorded $3.1 billion in inflows, while Asian funds recorded $7.5 billion in outflows.
Performance and Long-term Returns of Sustainable Funds
The median return rate of sustainable funds in the first half of 2026 is 4.9%, higher than the 4.0% of traditional funds, mainly due to the higher proportion of stocks in sustainable funds (56%, compared to 41% for traditional funds), while stock assets performed better in the first half of the year. Using the median indicator, sustainable stock funds recorded a return rate of 9%, while traditional stock funds recorded a return rate of 8.6%. In contrast, sustainable bond funds have shown weaker performance, with a median return rate of -1.3% in the first half of the year, compared to 1.3% for traditional funds.
72% of sustainable funds recorded positive returns in the first half of 2026, higher than the 67% of traditional funds. From a long-term return analysis, it is assumed that investing $100 each in sustainable funds and traditional funds in December 2018 will increase to $171 for sustainable funds and $159 for traditional funds by June 2026. The downward deviation of sustainable funds is -9.5%, which is better than the -10.3% of traditional funds, indicating that the potential downward risk of sustainable funds is lower.
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