1. Key themes:

  • The number of sustainability-focussed funds has continued to grow reaching a new record of 3,672 funds at the end of Q2 2022. However, the pace of growth slowed down (2% in Q2) relative to the previous 12 months when new funds were established at an average rate of ~4% per annum
  • Three of the top five fastest growing funds were “short-term” focussed suggesting the appetite for this maturity band as investors navigate a more volatile market environment and look to lower their portfolios’ duration
  • Consistently, ESG funds have underperformed from the beginning of the year with Article 9 funds (those with ESG as a core objective) the most exposed to the macro and geopolitical headwinds, in part due to the portfolio concentration in certain sectors
  • However, a core focus on ESG allowed Article 9 funds to be less exposed to outflows thereby highlighting their resilience in a bearish market

2. Sustainability funds characteristics

Total AUM of sustainability focussed funds by asset class (in USD trillions notional)

Total AUM of sustainability focussed funds by country (in USD trillions notional)

General attributes for the funds (By number of funds)

Total AUM and number of SFDR classified funds

Note: The EU Sustainable Finance Disclosure Regulation (SFDR) is a set of EU rules used to classify funds incorporating sustainability into investment processes. Article 8 indicates that the fund promotes environmental or social characteristics; Article 9 indicates that the fund has sustainable investment as its objective; Article 6 indicates that the fund does not incorporate sustainability as per EU standards. Out of the total 3,040 funds, 2,138 funds (70%) domiciled in Europe were classified as per the SFDR.

3. Sustainability fund evolution and performance

Evolution in the number of sustainability focussed funds

Evolution in AUM of sustainability focussed funds

SFDR Flows – AUM Q-Q % change

SFDR funds’ performance – total return (%)

4. Tables

Top 5 sustainability funds by AUM – Q2 2022

Top 5 sustainability funds by relative growth – Q2 2022 growth

Top 5 new sustainability focussed funds – Q2 2022


Total AUM is equal to USD2.1 trillion for fund asset classes and countries charts as of end of Q2 2022.

Country classification is as per fund manager’s country.

A total of 3,865 funds were considered for general attributes classification.

The 2,138 funds classified as per the SFDR are domiciled in Austria, Belgium, Bulgaria, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Romania, Slovakia, Slovenia, Spain, and Switzerland.

SFDR funds’ performance calculated as of date of last close price as provided by Bloomberg.

Fixed income asset class includes funds represented by corporate, government, aggregate, mortgage backed, municipals, asset backed, bank loans, convertible, inflation, protected, and preferred. These funds have ratings IG A or higher, IG B or higher, high yield and maturities ranging from ultra-short, short, inter, and long.

Mixed allocation asset class includes funds with risk characteristics ranging from aggressive, moderate, conservative, dynamic, and global.

Money market includes non-US money market (currency focussed, general MMKT, enhanced MMKT investing mainly in government-issued money markets) and US money market strategies (first tier, global, govt and agency, second tier, treasury and repo, treasury).

Alternative assets include funds characterised by investment strategies such equity hedge, event driven, fixed income directional, FI relative value, macro, CTA/Managed futures, and multi-strategy.

ESG includes environmental, social, and corporate governance – funds investing in companies compliant with ESG criteria.

Socially Responsible includes funds investing in securities of companies meeting socially responsible standards.

Environmentally Friendly includes funds investing in securities of companies contributing to improving the quality of the environment.

Climate Change includes funds investing in securities of companies facilitating adaptation to the impacts of climate change.

Clean Energy includes funds investing in securities of companies contributing to less carbon intensive energy production and consumption.

Source: Bloomberg; General attributes used for funds search include Clean Energy, Climate Change, Environmentally Friendly, ESG, and Socially Responsible

Updated on 24 July 2022.

This article has been prepared for information purposes only, does not constitute an analysis of all potentially material issues and is subject to change at any time without prior notice. NatWest Markets does not undertake to update you of such changes.  It is indicative only and is not binding. Other than as indicated, this article has been prepared on the basis of publicly available information believed to be reliable but no representation, warranty, undertaking or assurance of any kind, express or implied, is made as to the adequacy, accuracy, completeness or reasonableness of the information contained in this article, nor does NatWest Markets accept any obligation to any recipient to update or correct any information contained herein. Views expressed herein are not intended to be and should not be viewed as advice or as a personal recommendation. The views expressed herein may not be objective or independent of the interests of the authors or other NatWest Markets trading desks, who may be active participants in the markets, investments or strategies referred to in this article. NatWest Markets will not act and has not acted as your legal, tax, regulatory, accounting or investment adviser; nor does NatWest Markets owe any fiduciary duties to you in connection with this, and/or any related transaction and no reliance may be placed on NatWest Markets for investment advice or recommendations of any sort. You should make your own independent evaluation of the relevance and adequacy of the information contained in this article and any issues that are of concern to you.

This article does not constitute an offer to buy or sell, or a solicitation of an offer to buy or sell any investment, nor does it constitute an offer to provide any products or services that are capable of acceptance to form a contract. NatWest Markets and each of its respective affiliates accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

NatWest Markets Plc. Incorporated and registered in Scotland No. 90312 with limited liability. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. NatWest Markets N.V. is incorporated with limited liability in The Netherlands, authorised and supervised by De Nederlandsche Bank, the European Central Bank and the Autoriteit Financiële Markten. It has its seat at Amsterdam, The Netherlands, and is registered in the Commercial Register under number 33002587. Registered Office: Claude Debussylaan 94, Amsterdam, The Netherlands. NatWest Markets Plc is, in certain jurisdictions, an authorised agent of NatWest Markets N.V. and NatWest Markets N.V. is, in certain jurisdictions, an authorised agent of NatWest Markets Plc. NatWest Markets Securities Japan Limited [Kanto Financial Bureau (Kin-sho) No. 202] is authorised and regulated by the Japan Financial Services Agency. Securities business in the United States is conducted through NatWest Markets Securities Inc., a FINRA registered broker-dealer (http://www.finra.org), a SIPC member (www.sipc.org) and a wholly owned indirect subsidiary of NatWest Markets Plc.

Copyright © NatWest Markets Plc. All rights reserved.

scroll to top