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The performance of socially responsible mutual funds: the role of fees and management companies

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  • Javier Gil-Bazo

    ()

  • Pablo Ruiz-Verdu
  • Andre A. P. Santos

Abstract

In this paper, 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 significantly higher fees and better before- and after-fee performance than conventional funds with similar characteristics. Differences, however, were driven exclusively by SRI funds run by management companies specialized in socially responsible investment.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number wb083409.

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Date of creation: Jun 2008
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Handle: RePEc:cte:wbrepe:wb083409

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Keywords: Socially responsible investment; Mutual fund fees; Mutual fund performance; Matching estimators;

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References

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  1. Bauer, Rob & Derwall, Jeroen & Otten, Róger, 2007. "The ethical mutual fund performance debate: new evidence from Canada," Open Access publications from Maastricht University urn:nbn:nl:ui:27-19324, Maastricht University.
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  3. Gil-Bazo, Javier & Ruiz-Verdú, Pablo, 2009. "The relation between price and performance in the mutual fund industry," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/7474, Universidad Carlos III de Madrid.
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Citations

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Cited by:
  1. Iván Barreda-Tarrazona & Juan Matallín-Sáez & Mª Balaguer-Franch, 2011. "Measuring Investors’ Socially Responsible Preferences in Mutual Funds," Journal of Business Ethics, Springer, vol. 103(2), pages 305-330, October.
  2. Rathner, Sebastian, 2013. "The Relative Performance of Socially Responsible Investment Funds. New Evidence from Austria," Working Papers in Economics and Finance 2013-1, University of Salzburg.
  3. Francisco Climent & Pilar Soriano, 2011. "Green and Good? The Investment Performance of US Environmental Mutual Funds," Journal of Business Ethics, Springer, vol. 103(2), pages 275-287, October.

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