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Do Socially Responsible Fund Managers Really Invest Differently?

  • Karen L. BensonEmail author
  • Timothy J. Brailsford
  • Jacquelyn E. Humphrey
Article

Abstract

To date, research into socially responsible investment (SRI), and in particular the socially responsible investment funds industry, has focused on whether investing in SRI assets has any differential impact on investor returns. Prior findings generally suggest that, on a risk-adjusted basis, there is no difference in performance between SRI and conventional funds. This result has led to questions about whether SRI funds are really any different from conventional funds. This paper examines whether the portfolio allocation across industry sectors and the stock-picking ability of SRI managers are different when compared to conventional fund managers. The study finds that SRI funds exhibit different industry betas consistent with different portfolio positions, but that these differences vary from year to year. It is also found that there is little difference in stock-picking ability between the two groups of fund managers.

Keywords

socially responsible investment managed funds portfolio composition ethical investment 

Abbreviations

SRI

Socially responsible investment

S&P

Standard and Poor’s

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Copyright information

© Springer 2006

Authors and Affiliations

  • Karen L. Benson
    • 1
    Email author
  • Timothy J. Brailsford
    • 1
  • Jacquelyn E. Humphrey
    • 1
  1. 1.UQ Business SchoolThe University of QueenslandSt. LuciaAustralia

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