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Socially responsible, green, and faith-based investment strategies: Screening activity matters!

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  • Lesser, Kathrin
  • Rößle, Felix
  • Walkshäusl, Christian

Abstract

Analyzing more than 200 internationally-investing sustainably screened funds, we find that socially responsible, green, and faith-based investments have to be considered as different approaches within the broader field of sustainable investing. While socially responsible and green funds tend to underperform in non-crisis markets, faith-based funds perform similar to the market and their conventional peers during any market state. We provide evidence that the funds’ specific screening activity significantly impacts the financial performance of sustainable investing vehicles in international markets. In particular, social screens lead to the underperformance of socially responsible funds, while energy screens drive the performance of green funds.

Suggested Citation

  • Lesser, Kathrin & Rößle, Felix & Walkshäusl, Christian, 2016. "Socially responsible, green, and faith-based investment strategies: Screening activity matters!," Finance Research Letters, Elsevier, vol. 16(C), pages 171-178.
    • Handle: RePEc:eee:finlet:v:16:y:2016:i:c:p:171-178
    DOI: 10.1016/j.frl.2015.11.001
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    More about this item

    Keywords

    Sustainable investment strategies; Mutual funds; International markets; Performance evaluation; Screening activity;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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