Skip to main content
SpringerLink
Log in

Ranking Socially Responsible Mutual Funds Based on the Particular Preferences of the Decision Maker

  • Chapter
  • First Online:
Socially Responsible Investment

Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 219))

  • 2769 Accesses

Abstract

Several methods for ranking mutual funds based on financial performance have been developed, but few of them propose a ranking methodology based on their non-financial performance. The aim of this chapter is to present two ranking methods for mutual funds based on their socially responsible performance. The ranking approaches suggested can be understood as complement financial information which can help socially responsible mutual fund managers, individual and institutional investors in their portfolio selection process. Both methods use multiple criteria decision analysis (MCDA) techniques, namely, one is based on AHP (Analytic Hierarchy Process) and the other one apply MACBETH (Measuring Attractiveness by a Categorical Based Evaluation Technique). The results reveal that an integrated framework using multiple criteria decision analysis (MCDA) techniques could help the investor in selecting a suitable socially responsible mutual funds portfolio, because the consideration of several criteria reflect more precisely the multiple dimensions of this decision making problem.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    This chapter is closely related to and heavily based on Pérez-Gladish and M’Zali (2010) published in the International Journal of Multicriteria Decision Making.

References

  • Arbel, A., & Orgler, Y. (1990). An application of the AHP to bank strategic planning: The mergers and acquisitions process. European Journal of Operational Research, 48(1), 27–37.

    Article  Google Scholar 

  • Bana e Costa C. A., & Beinat, E. (2005). Model-Structuring in Public Decision-Aiding. Working Paper LSEOR 05.79, London School of Economics, London.

    Google Scholar 

  • Bana e Costa, C., & Vansnick, J. C. (1994). MACBETH – An interactive path towards the construction of cardinal value functions. International Transactions in Operational Research, 1(4), 489–500.

    Google Scholar 

  • Bana e Costa, C., & Vansnick, J. C. (1999). The MACBETH approach: Basic ideas, software, and an application. In N. Meskens & M. Roubens (Eds.), Advances in decision analysis (Mathematical modelling: Theory and applications, Vol. 4, pp. 131–157). Boston: Kluwer.

    Google Scholar 

  • Bana e Costa, C., & Vansnick, J. C. (2008). A critical analysis of the eigenvalue method used to derive priorities in AHP. European Journal of Operational Research, 8(3), 1422 –1428.

    Google Scholar 

  • Bana e Costa, C., De Corte, J., & Vansnick, J. (2003). MACBETH. Working Paper LSEOR 03.56, London School of Economics, London.

    Google Scholar 

  • Barnett, M. L., & Salomon, R. M. (2006). Beyond dichotomy: The curvilinear relationship between social responsibility and financial performance. Strategic Management Journal, 27(11), 1101–1122.

    Article  Google Scholar 

  • Basso, A., & Funari, S. (2003). Measuring the performance of ethical mutual funds: A DEA approach. Journal of the Operational Research Society, 54(5), 521–531.

    Article  Google Scholar 

  • Belton, V. (1999). Multi-criteria problem structuring and analysis in a value theory framework. In T. Gal, T. Stewart, & T. Hanne (Eds.), Multicriteria decision making (International series in operations research & management science, Vol. 21, pp. 335–366). Boston: Kluwer.

    Google Scholar 

  • Belton, V., & Gear, T. (1983). On a short-coming of Saaty’s method of analytic hierarchies. Omega, 11(3), 228–230.

    Article  Google Scholar 

  • Belton, V., & Gear, T. (1985). The legitimacy of rank reversal–A comment. Omega, 13(3), 143–144.

    Article  Google Scholar 

  • Expert Choice. (2009). Version 11.5. Pittsburgh: Expert Choice.

    Google Scholar 

  • Harrington, S. (1997). A test of a person – Issue contingent model of ethical decision making in organizations. Journal of Business Ethics, 16(4), 363–375.

    Article  Google Scholar 

  • Hollingworth, S. (1998). Green investing: A growing concern? Australian CPA, 68, 28–30.

    Google Scholar 

  • Jones, T. (1991). Ethical decision making by individuals in organizations: An issue-contingent model. The Academy of Management Review, 16(2), 366–395.

    Google Scholar 

  • KLD (2007). Environmental, Social and Governance Ratings Criteria. KLD Research, www.kld.com.

  • Meziani, A., & Rezvani, F. (1990). Using the analytical hierarchy process to select a financing instrument for a foreign investment. Mathematical and Computer Modelling, 13(7), 77–82.

    Article  Google Scholar 

  • Millet, I. (1998). Ethical decision making using the analytic hierarchy process. Journal of Business Ethics, 17(11), 1197–1204.

    Article  Google Scholar 

  • Perez-Gladish, B., & M’Zali, B. (2010). An AHP-based approach to mutual funds social performance measurement. International Journal of Multicriteria Decision Making, 1(1), 103–127.

    Article  Google Scholar 

  • Roubens, M., Rusinowska, A., & Swart, H. de. (2006). Using MACBETH to determine utilities of governments to parties in coalition formation. European Journal of Operational Research, 172(2), 588–603.

    Article  Google Scholar 

  • Saaty, T. (1977). A scaling method for priorities in hierarchical structures. Journal of Mathematical Psychology, 15(3), 234–281.

    Article  Google Scholar 

  • Saaty, T. (1980). The analytical hierarchy process. New York: MacGraw-Hill.

    Google Scholar 

  • Saaty, T. (1983). MACBETH – An interactive path towards the construction of cardinal value functions. IEEE Transaction on Engineering Management, EM-30(3), 140–155.

    Article  Google Scholar 

  • Saaty, T. (1994). Fundamentals of decision making and priority theory with the AHP. Pittsburgh: RWS Publications.

    Google Scholar 

  • Saaty, T. (2001). Decision making for leaders: The analytic hierarchy process for decisions in a complex world. New edition 2001 (Analytic hierarchy process series, Vol. 2). Pittsburgh: RWS Publications.

    Google Scholar 

  • Schmidt, A. M. A. (1995). Processo de Apoio à Tomada de Decisão Abordagens: AHP e MACBETH. MSc dissertation, Universidade Federal de Santa Catarina, Brazil.

    Google Scholar 

  • Scholtens, B. (2007). Financial and social performance of socially responsible investments in the Netherlands. Corporate Governance: An International Review, 15(6), 1090–1105.

    Article  Google Scholar 

  • Stein, E., & Ahmad, N. (2009). Using the analytical hierarchy process (AHP) to construct a measure of the magnitude of consequences component of moral intensity. Journal of Business Ethics, 89(3), 391–407.

    Article  Google Scholar 

  • Steuer, R., & Na, P. (2003). Multiple criteria decision making combined with finance: A categorized bibliographic study. European Journal of Operational Research, 150(3), 496–515.

    Article  Google Scholar 

  • Tarimcilar, M., & Khaksari, S. (1991). Capital budgeting in hospital management using the analytic hierarchy process. Socio-Economic Planning Sciences, 25(1), 27–34.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Facultad de Comercio y Gestión, University of Málaga, Campus Teatinos, Málaga, 29071, Spain

    Ana B. Ruiz

  2. Affiliated Researcher at CRG-ESCA, ESG-UQAM, case postale 8888, succursale Centre-ville, Montrèal, QC, H3C 3P8, Canada

    Bouchra M’Zali

  3. Universidad de Oviedo, Avda. del Cristo s/n, 33006, Oviedo (Asturias), Spain

    Paz Méndez-Rodrı́guez

Authors
  1. Ana B. Ruiz
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Bouchra M’Zali
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Paz Méndez-Rodrı́guez
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Ana B. Ruiz .

Editor information

Editors and Affiliations

  1. Department of Economics and Social Sciences, Universitat Politècnica de València, Alcoy, Spain

    Enrique Ballestero

  2. Department of Quantitative Economics, University of Oviedo, Oviedo, Asturias, Spain

    Blanca Pérez-Gladish

  3. Department of Economics and Social Sciences, Universitat Politècnica de València, Alcoy, Spain

    Ana Garcia-Bernabeu

Rights and permissions

Reprints and permissions

Copyright information

© 2015 Springer International Publishing Switzerland

About this chapter

Cite this chapter

Ruiz, A.B., M’Zali, B., Méndez-Rodrı́guez, P. (2015). Ranking Socially Responsible Mutual Funds Based on the Particular Preferences of the Decision Maker. In: Ballestero, E., Pérez-Gladish, B., Garcia-Bernabeu, A. (eds) Socially Responsible Investment. International Series in Operations Research & Management Science, vol 219. Springer, Cham. https://doi.org/10.1007/978-3-319-11836-9_12

Download citation

Publish with us

Policies and ethics

Search

Navigation