The first half of 2019 was a good one for sustainable mutual funds and ETFs, according to a new Morningstar analysis.
Flows into sustainable funds during the first six months of this year were more than 60% larger than flows for all of 2018: up $8.9 billion in the first half versus $5.5 billion.
Performance among the 42 funds that were at least three years old by midyear — old enough to earn a Morningstar star rating — was also strong. Close to 70% placed in the top half of trailing annualized returns — 33% in the top quartiles and 36% in the second quartile.
On a risk-adjusted basis, 43% of those funds received four to five stars, 38% three stars and 19% one or two stars, reflecting stronger performance than the overall fund universe, split one-third in each of these ratings segments.
“So far, so good,” writes Jon Hale, head of sustainability research at Morningstar, about the performance of sustainability funds over the past three years. “These results show pretty impressive initial performance from sustainable funds.”