U.S. ESG Funds See Heavy Outflows as Strategy Enters Quieter Phase

According to The Wall Street Journal, citing Morningstar data, U.S. ESG funds have recorded $65.7 billion in net outflows since the second quarter of 2022, equal to about 20% of their average assets over the period. Despite the withdrawals, cumulative returns of 34.9% helped lift ESG fund assets to $350.7 billion as of March 2026, below the record $367.5 billion reached at the end of 2025. New U.S. ESG fund launches fell from 116 in 2021 to nine in 2025, while 91 funds closed in 2025. The report said ESG investing has not disappeared, but many institutions are pursuing sustainability and risk-related goals with less public emphasis.