Flows to Article 8 funds increase in the third quarter, while Article 9 extends its negative streak
5 NOV, 2025
By Joanna Piwko from RankiaPro Europe
The funds classified as Article 8 according to the European SFDR regulation recorded a strong rebound in flows in the third quarter of 2025, according to the report "Article 8 and Article 9 Funds of the SFDR: Third Quarter Review of 2025" published by Morningstar.
Strategies with integration of environmental, social and governance (ESG) factors captured 75,000 million euros in new net investments, a figure that represents a significant increase compared to the 47,000 million in the previous quarter. However, this advance still lags behind Article 6 funds, which —despite representing a smaller portion of the European market— added 134,000 million euros in the same period.
In contrast, the investment funds classified as Article 9 extended their negative streak for the eighth consecutive quarter, with net redemptions of 7,100 million euros, compared to 1,400 million in the previous quarter.
Fixed income and rebranding: the two dominant forces of the quarter
The fixed income funds consolidated as the main flow capturers within the sustainable universe. Article 8 vehicles accumulated 49,000 million euros, while Article 6 added 34,000 million.
The total value of the combined assets of Article 8 and 9 funds increased by 6%, reaching 6.8 trillion euros, mainly driven by market revaluation. Their joint market share remains close to 59% of the total fund assets in the European Union.
In parallel, the report highlights a decrease in fund name change activity after the deadline of May 21 set by ESMA in its guidelines on denominations. During the third quarter, 121 Article 8 and 9 investment funds changed their names:
- 64 removed terms linked to ESG
- 44 replaced them
- 13 added them
Since January 2024, at least 1,450 sustainable funds have been renamed, representing about 31% of the funds subject to regulatory guidelines.
ESG language adapts, but "sustainable" continues to reign
The report also analyzes trends in the use of ESG terminology in fund names. The term "sustainable" remains the most popular, present in more than 860 products as of the end of September. It is followed by "ESG", with 709 funds, and references to "transition", used in about 310 funds.
This evolution reflects a reorientation of the market towards more prudent language, in response to regulatory demands and increasing attention on greenwashing within the framework of the SFDR.
Flows into Article 8 funds recovered in the last three months, reaching their highest level since 2021. However, the recovery was more moderate compared to the overall market. Demand for Article 8 equity funds remains weak, while outflows from dark green Article 9 funds continue, despite the good performance of renewable energy stocks this year. Meanwhile, fixed income remained a strong point for both Article 8 and Article 9 funds, driven by investors' growing appetite for high-yield bond strategies amid easing interest rates.
Hortense Bioy, head of sustainable investing research at Morningstar Sustainalytics
