Sustainable Bottom Line: The absence of new focused sustainable fund listings for the third consecutive month continues to reflect the dramatic slowdown in new funds.
Notes of Explanation: New fund listings exclude the introduction of additional share classes. Sources: Morningstar and Sustainable Research and Analysis LLC.
Observations:
• Focused sustainable new fund listings remained dormant during October, for the third consecutive month. It is also the sixth non-consecutive month so far this year with zero new listings of focused sustainable mutual funds or ETFs. At the end of October, there were 1,202 listed focused long-term sustainable mutual funds/share classes and ETFs with $380.0 billion in assets under management, based on Morningstar data.
• Year-to-date, only seven new launches were documented (excluding any new mutual fund share classes), compared to eight new listings during the same period in 2024 and 65 in 2023. Of the seven new listings this year, four were ETFs and three were mutual funds. The drop-off in new listings continues to reflect the dramatic slowdown in new focused sustainable fund offerings, starting in mid-2023 to date.
• As noted above, new mutual fund share classes are not included in the count of new fund listings. However, there was one mutual fund share class listing with a twist, backdated to September 2025, that may be of interest to fossil fuel free investors, namely The Sphere 500 Climate Fund Institutional Share Class (SPFEX). Originally listed in 2021 as the Sphere 500 Climate Fund R6 Share Class with a 0.07% expense ratio and no minimum investment requirement, the $56.4 million index tracking fund in September expanded its share class offerings to include the 0.30% Institutional Share class (SPFEX) intended for 401(k) and 403 (b) plans. The fund’s investable universe consists of the largest 500 U.S. companies that make up the Sphere 500 Fossil-Free Index but excludes from the investable universe fossil fuel, deforestation, private prison, weapons and tobacco companies based on research and an exclusionary list provided by As You Sow, a shareholder advocacy non-profit organization. It should be noted that these considerations do not lead to the exclusion of companies, such as META or Tesla that recently accounted for 3.3% and 2.5% of the funds assets, to mention just two that are exposed to some contradictions in areas such as corporate governance or product safety that might be stumbling blocks for some sustainable or responsible investors. An additional unique feature is that the fund’s adviser, Reflection Asset Management, has committed to voting its shares to encourage climate action by using a voting service offered by As You Sow called As You Vote. This means that anytime a shareholder vote takes place at a company that the Sphere fund invests in on a topic having to do with climate change, SPFFX as well as SPFEX will vote their shares “for long-term value creation of the company and climate action.”
• Also in October, the universe of focused sustainable funds declined further. Not only was there an absence of new fund offerings in October, but there were also five focused sustainable ETF liquidations during the month. These include three thematic and two diversified equity funds, each with net assets below $15 million, reflecting the risk of closure when funds are unable to achieve break even at around $30 million in assets under management. The funds, are: Calvert US Select Equity ETF, Direxion Daily Electric & Autonomous Vehicles Bull 2X ETF, Janus Henderson US Sustainable Equity ETF, JPMorgan Carbon Transition US Equity ETF and JPMorgan Climate Change Solutions ETF.
