Environmental, social and governance (ESG) funds in South-east Asia experienced their second consecutive quarter of net outflows in Q2 2024, according to Morningstar data. ESG equity funds in Indonesia, Malaysia, Thailand, and Singapore lost USD25.3m, a reduction from USD79.8m the previous year but higher than the USD246,900 outflow in Q1. Meanwhile, non-ESG funds attracted USD2.2bn, driven by fixed-income and money market strategies as investors sought higher yields ahead of interest rate changes. Christopher Wong of Fidelity International noted the shift reflects a preference for stable returns amid economic uncertainty. Despite the outflows, ESG assets remain stable at around 5% of total assets, with strong investments in energy transition sectors, Citi’s Elree Winnett Seelig said.