According to Morningstar’s January 10th story, “Sustainable Fund Flows in 2019 Smash Previous Records”, the famous saying, ‘the proof is in the pudding’, seems to be true. There was an estimated $20.6 billion of net flows into U.S. open-end and exchange-traded sustainable funds in 2019, smashing the previous record in 2018 by nearly four times. In fact, the fourth quarter led 2019 with the biggest flows, jumping to an estimated $7.1 billion to round out the historic year.1
These strengthening inflows prove that investors see the benefit in creating positive environmental and social change in their portfolios while delivering competitive returns. This past year marked the fourth straight year of record annual net flows to U.S. sustainable funds and the fourth quarter’s net flows alone were higher than the sum of all 2018 flows. As the story states, “With growing investor interest in sustainable investing, especially among younger investors, 2019's flows may be the leading edge of a huge wave of assets to come.” We agree and like the rest of the industry, saw our highest year of net flows in 2019. This is not surprising given the large increase and demand for impact and ESG investments. We look forward to seeing this number continue to increase throughout this new decade as more and more investors realize the dual benefit of integrating impact and ESG factors into their portfolios.