Morgan Stanley(US:MS) Yahoo Finance·2025-09-23 12:30Core Insights - Sustainable funds have outperformed traditional funds since December 2018, with total returns of 54% for sustainable funds compared to 45% for traditional funds according to Morgan Stanley analysis [3] - Total assets under management (AUM) for sustainable funds reached an all-time high of $3.92 trillion in the first half of 2025, with 92% of sustainable funds showing positive returns versus 85% for traditional funds [3][4] - Sustainable funds represent 6.7% of total AUM, a slight increase from 6.6% at the end of 2024, but down from 7.3% in June 2023 due to greater net inflows into traditional funds [4] Performance and Inflows - Net inflows for sustainable funds have declined from over $100 billion in 2022 and 2023 to $80 billion in 2024, although they showed signs of recovery in Q2 2025 [4][5] - European sustainable funds had $24.7 billion in inflows during the first half of 2025, significantly higher than the $2.7 billion in Asia, although Asia-domiciled funds had the strongest net flows as a percentage of prior year-end AUM at 2.6% [6][7] - In the first half of 2025, sustainable funds had net inflows of $16 billion, which was 0.5% above prior year-end AUM, while traditional funds had a higher inflow of 2.1% [8] Comparative Returns - Median returns for sustainable funds were 12.5% in the first half of 2025, compared to 9.2% for traditional funds, marking the strongest outperformance period for sustainable funds since tracking began in 2019 [8]