Provided herein are functional fluid compositions useful in hydraulic fluid and gear oil formulations. The formulations according to the invention include a predominant amount of at least one polyoxyalkylene glycol derived from the addition polymerization of an alcohol in the presence of an alkylene oxide mixture which contains a substantial amount of ethylene oxide. Fluids according to the invention exhibit suitable lubricity and stability characteristics and are generally water soluble to a degree sufficient to preclude formation of a sheen on the surface of a body of water into which a fluid according to the invention is brought into contact.