ESG funds outflow at Rs510cr in June qtr

New Delhi Sustainable or ESG (environmental, social, and governance) funds in the country witnessed an outflow of Rs520 crore in the April-June quarter of this fiscal, according to a report by Morningstar.

This was higher than a withdrawal of Rs470 crore seen from such funds in the preceding quarter. “While initial fund launches have attracted significant interest and flows, we have yet to witness continued flows for sustainable funds after their initial fund launch period. This has resulted in the lack of a discernible trend on a quarterly basis,” the report noted. Continuing the trend of outflow, the year-to-date 2023 withdrawal was at Rs1,060 crore as compared to Rs1,020 crore in the preceding year. This is in contrast to the infusion of Rs1.83 lakh crore for the year to date in the overall fund market. The report revealed that the coronavirus pandemic led to a marked increase in investor interest and fund launches for sustainable funds globally. “While the Indian sustainable fund market is still in its nascent state, we have witnessed a similar trend since Covid-19 with a handful of new fund launches. Since then, there have been no new fund launches in the past 24 months,” the report said.