Wave of ESG Fund Closures Builds in US With Few New Launches (2)

The market for ESG-focused funds keeps shrinking.

Ninety-one US-based funds shut down last year, compared with the launch of just nine new offerings, according to data compiled by Morningstar Inc.

It’s a trend that has been building since mid-2023 and underscores “ongoing consolidation and subdued product development in the sustainable fund landscape,” analysts Alyssa Stankiewicz and Mahi Roy wrote in a report.

Still, about 430 sustainable funds remain in the US, exceeding the total at the end of 2020, Stankiewicz said in an interview.

The closures occurred during a year when $21 billionwas withdrawn ...