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IMPORTANCE OF THE FUND MANAGEMENT COMPANY IN THE PERFORMANCE OF SOCIALLY RESPONSIBLE MUTUAL FUNDS
Author(s) -
Belghitar Yacine,
Clark Ephraim,
Deshmukh Nitin
Publication year - 2017
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/jfir.12127
Subject(s) - passive management , fund of funds , closed end fund , global assets under management , sample (material) , business , finance , investment management , investment (military) , open end fund , financial crisis , index fund , stable value fund , institutional investor , economics , corporate governance , politics , chemistry , chromatography , market liquidity , political science , law , macroeconomics
Abstract We compare the performance of a sample of U.K.‐based socially responsible investment (SRI) funds with similar conventional funds using a matched‐pair analysis based on size, age, investment universe, and fund management company (FMC). We find that both the SRI and conventional funds outperform the market index about 50% of the time, even after fees. Subsample tests show that the SRI funds in our sample perform better in the pre‐ and postfinancial crisis periods but underperform during the financial crisis period. Importantly, we find that the FMC plays a major role in the outperformance of both SRI and conventional funds.