Green and Good? The Investment Performance of US Environmental Mutual Funds
- 1.3k Downloads
Increased concern for the environment has increased the number of investment opportunities in mutual funds specialized in promoting responsible environmental attitudes. This article examines the performance and risk sensitivities of US green mutual funds vis-à-vis their conventional peers. We also analyze and compare this performance relative to other socially responsible investing (SRI) mutual funds. In order to implement this analysis, we apply a CAPM-based methodology and find that in the 1987–2009 period, environ- mental funds had lower performance than conventional funds with similar characteristics. However, if we focus on a more recent period (2001–2009), green funds achieved adjusted returns not significantly different from the rest of SRI and conventional mutual funds.
Key wordssocially responsible investments mutual funds performance evaluation ethical investing corporate social responsibility
Jel ClassificationF30 G11 G15 G23 M14
Unable to display preview. Download preview PDF.
- Derwall, J. and K. Koedijk: 2009, ‘Socially Responsible Fixed-Income Funds’, Journal of Business Finance & Accounting 36(1–2), 210–229.Google Scholar
- SIF: 2007, Social Investment Forum Trends Report (Social Investment Forum, Washington).Google Scholar
- Treynor, J.L. (1965): “How to Rate Management of Investment Funds”, Harvard Business Review, 43 (1), 63-75.Google Scholar
- White, M. A. (1995): “The Performance of Environmental Mutual Funds in the United States and Germany: Is There Economic Hope for Green Investors?”, Research in Corporate Social Performance and Policy supplement,1, 323–344.Google Scholar