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Ethical Unit Trust Financial Performance: Small Company Effects and Fund Size Effects

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Author Info
Alan Gregory (Department of Accounting and Finance, University of Aberystwyth,)
John Matatko
Robert Luther
Abstract

Recent papers which have examined unit trusts have controlled either for a 'fund size effect' or for the 'small firms effect' in the investment portfolio. The contribution of this paper is an analysis of the 'small firms effect' whilst simultaneously controlling for the 'fund size effect'. We show that the ethical unit trusts have significantly greater exposure than general unit trusts to the 'small firms effect', and that net of this there is no significant evidence of over or under performance by ethical trusts using an adjusted Jensen measure. Using two cross-sectional approaches, we demonstrate that whilst a 'small firms effect' has a role to play in explaining unit trust performance, fund size is not correlated with the financial performance of unit trusts. This cross-sectional analysis also provides some evidence that ethical unit trusts may perform less well than general unit trusts. Copyright Blackwell Publishers Ltd 1997.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1468-5957.00130
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Article provided by Blackwell Publishing in its journal Journal of Business Finance & Accounting.

Volume (Year): 24 (1997-06)
Issue (Month): 5 ()
Pages: 705-725
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Handle: RePEc:bla:jbfnac:v:24:y:1997-06:i:5:p:705-725

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