Sustainable strategies don’t guarantee sustainable flows.

Investors pulled $21 billion last year from US mutual funds and ETFs with sustainable investment strategies, a record pace that just surpassed the previous high of $20 billion in 2024, according to a recent Morningstar report. By comparison, the broader world of US mutual funds and ETFs brought in $760 billion in 2025. The slow drain from sustainable funds follows a widespread pullback from the category that started several years ago, marked by strong fossil fuel market performance at the beginning of Russia’s invasion of Ukraine and a long-running campaign by the political right against environmental, social and governance criteria.

“While there are non-financial…