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Ethical and socially responsible investment funds

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  • Robert Watson

Abstract

Purpose - The purpose of this paper is to evaluate the marketing of ethical and socially responsible investment (ESRI) funds to retail investors and to analysis the plausibility of the claims made in regard to their performance, achievements and prospects. Design/methodology/approach - The paper presents an analysis of the claims and marketing strategy adopted in the ESRI industry'sAction Guide for Financial Advisorsdocument, produced for their National Ethical Investing Week, 2010. Findings - The analysis indicates that the ESRI fund industry'sAction Guideuses a number of unethical marketing techniques to induce retail investors into investing in ESRI funds and that many of the claims made on behalf of ESRI investing are implausible. Given the past history of mis‐selling in the investment fund sector, these findings ought to be of some concern to regulators and retail investors. Originality/value - This is the first article that has linked the promotion and marketing of ESRI funds to possible mis‐selling practices.

Suggested Citation

  • Robert Watson, 2011. "Ethical and socially responsible investment funds," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 19(2), pages 100-110, May.
    • Handle: RePEc:eme:jfrcpp:v:19:y:2011:i:2:p:100-110
    DOI: 10.1108/13581981111123825
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    References listed on IDEAS

    as
    1. Alan Gregory & John Matatko & Robert Luther, 1997. "Ethical Unit Trust Financial Performance: Small Company Effects and Fund Size Effects," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(5), pages 705-725, June.
    2. Alan Gregory & John Matatko & Robert Luther, 1997. "Ethical Unit Trust Financial Performance: Small Company Effects and Fund Size Effects," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(5), pages 705-725.
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