Journal of Business Ethics

, Volume 94, Issue 2, pp 243–263 | Cite as

The Performance of Socially Responsible Mutual Funds: The Role of Fees and Management Companies

  • Javier Gil-Bazo
  • Pablo Ruiz-Verdú
  • André A. P. Santos


In this article, we shed light on the debate about the financial performance of socially responsible investment (SRI) mutual funds by separately analyzing the contributions of before-fee performance and fees to SRI funds’ performance, and by investigating the role played by fund management companies in the determination of those variables. We apply the matching estimator methodology to obtain our results and find that in the period 1997–2005, US SRI funds had better before- and after-fee performance than conventional funds with similar characteristics. The differences, however, are driven exclusively by SRI funds run by management companies specialized in SRI. While these funds significantly outperform similar conventional funds, funds run by companies not specialized in SRI underperform their matched conventional funds. We find no significant differences in fees between SRI and conventional funds except in one case: SRI funds are cheaper than conventional funds run by the same management company.


socially responsible investment mutual fund fees mutual fund performance 


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The authors thank Sally Gunz (the Section Editor) and two anonymous reviewers for their comments, which have led to substantial improvements in the paper. We are also grateful to Manuel Bagüés, Iraj Fooladi, Vasiliki Skintzi, and seminar participants at Universidad Carlos III de Madrid, 2008 European Conference of the Financial Management Association, 2008 European Financial Management Association Meeting, and 2008 Spanish Finance Association Meeting for helpful comments and suggestions. The usual disclaimer applies. The financial support of Spain’s Ministry of Education and Science (SEJ2005-06655, SEJ2007-67448 and CSD2006-00016) and the Madrid Autonomous Region (S2007/HUM0413) is gratefully acknowledged.


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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • Javier Gil-Bazo
    • 1
  • Pablo Ruiz-Verdú
    • 1
  • André A. P. Santos
    • 1
  1. 1.Universidad Carlos III de MadridMadridSpain

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