For the first time in more than a year, sustainable fund flows returned to positive territory in the second quarter of 2026.
A report from LSEG Lipper, published this week, showed there were flows of £173mn in the quarter following five consecutive quarters of net redemptions.
Sustainable flows were led by bonds adding £604mn in the quarter.
Equities remained the largest drag with £452mn of outflows.
In the first half of 2026, institutional investors allocated £1.25bn to sustainable funds which offset £860mn of retail redemptions
Sustainable Asset Class AUM, 2017 to June 2026 (£bn)© LSEG Lipper
The report said: “Equity funds remained the largest source of redemptions, losing £452mn, although this was less than half Q1’s £1.11bn outflow.
“Mixed-assets funds also stayed in negative territory, with £233mn redeemed, compared with £559mn in Q1.
“Commodity funds recorded a modest £2mn outflow. Combined positive contributions of £860mn therefore outweighed £687mn of redemptions across equity, mixed assets and commodities.”
Five-year quarterly flows, to Q2 2026© LSEG Lipper
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Five consecutive negative quarters came to an end this year, though the Q2 total “remained modest” compared with the positive quarters before 2025.
The report also broke down flows into sustainability disclosure requirement (SDR-labelled) funds.
It marks two years since the labels were rolled out by the Financial Conduct Authority.
SDR Categories AUM June 2026 (£bn)© LSEG Lipper
LSEG Lipper recorded £40.32bn in SDR-labelled funds at end-June 2026.
Of this figure, the Sustainability Focus label accounted for 85.5 per cent of the total with £34.47bn.
tara.o’connor@ft.com
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