Nov 21 (Reuters) - Investors are on track to withdraw

more money from global climate funds than they deposit this year

for the first time, Morningstar Sustainalytics said on Thursday,

presenting an obstacle to energy-transition efforts.

Net withdrawals from the funds reached nearly $24 billion

for the first nine months of 2024, the arm of Chicago-based

research firm Morningstar ( MORN ) said, compared with net

deposits of $40 billion during the first nine months of 2023.

The funds have recorded net deposits every year since they

were tracked separately in 2018, peaking at $151 billion in

2021. Inflows then fell to $60 billion in 2022 and $40 billion

for 2023, Morningstar Sustainalytics said.

The research firm said the recent outflows reflect factors

such as the poor performance of renewable energy stocks,

concerns about greenwashing, and anti-ESG sentiment.

High interest rates also played a role, said Hortense Bioy,

head of sustainable investing research at Morningstar

Sustainalytics, holding back the performance of growth-oriented

companies involved in areas such as solar power.

"Those are the companies that can be quite sensitive to

interest rates. The financing costs have really weighed on their

valuations in the stock market," Bioy said.

Climate funds' total assets were $572 billion as of Sept.

30, up 6% from the start of the year, driven by market

appreciation. About 85% of those assets were held in

European-domiciled funds, with 6% in China-based funds and 5% in

U.S.-based funds.

Among the climate funds, climate-transition funds that favor

companies better positioned for a low-carbon economy had an

average return of 17.2% through September, versus 12.4% for the

average peer in the global large-cap blend equity category.

Clean energy/tech funds have lagged peers since 2021 and had

a negative return of 3.2% through September.

There were 69 new climate-fund launches through September,

off their 2023 pace when more than 200 were launched over the

full year.