ESG Is Imploding in the US, Let’s Hope It Continues

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Here is some good economic news despite the bad economic news today. ESG funds are imploding in the US, suffering nearly $9 billion in outflows in the first three months of 2024 alone – marking the worst quarterly outflows from ESG funds ever recorded.

ESG pushes the leftist ideology over capitalism. CEO Larry Fink pretends the right and left bastardized the purpose behind it, when, in fact, it was a scam from the beginning.

Bloomberg reports that US fund managers with ESG mandates had their worst-ever outflows. US ESG funds had $8.8 billion of withdrawals in the first quarter. Bloomberg says global inflows were modest at $900 million, buoyed by Europe.

That starkly contrasted the roughly $11 billion of inflows into ESG funds in Europe, where sustainable investing regulations are far more entrenched.

It’s the latest sign that US investors are turning their backs on the investment strategy, which high-profile Republicans have targeted as “woke” and anti-American in its design. At the same time, many core ESG industries, such as wind and solar, have suffered setbacks, leading to poor returns and further alienating many investors, writes author Frances Schwartzkopff.

It’s not an investment strategy if you want to make money, which is what investment used to mean. Now, it means taxes and pushing leftist goals.

“Sustainable funds have been facing many headwinds in the past couple of years, including elevated energy prices, high interest rates, and an ESG backlash in the US,” said Hortense Bioy, global director of sustainability research at Morningstar.

Forcing these things before they are ready is a bad investment strategy. There is also the fact that it requires investment in China, which, at this point, is a bad idea. China has the parts we need. Whenever a big government does the investing, it fails. Big Government is a handful of elites making the decisions for the majority who have to buy into it.

Investors are looking to the elections. If Trump wins, investing will go back to capitalism. If Biden wins, it’s more socialism, and ESG flourishes with friends of the administration grabbing up grants and contracts.

Globalist Larry Fink is still doing quite well as Bloomberg notes:

The global development reflects “caution ahead of key elections in the US and Europe, which will determine the pace of future green policies and encourage or discourage more sustainable practices,” Bioy said.

When taking stock price gains into account, global sustainable fund assets rose 1.8% last quarter to just under $3 trillion at the end of March. The organic growth rate, however, was close to zero, compared with growth of 0.5% in the broader funds universe, according to Morningstar.

Passive products continued to gain ground, and BlackRock Inc, the world’s largest money manager, maintained its lead. Its $368 billion in sustainable assets are roughly twice those of Amundi SA, the biggest investment manager in Europe.

The genius of the White House:


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