IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i10p530-d1755814.html
   My bibliography  Save this article

Do Active Sustainable Equity Funds Outperform Their Passive Peers? Evidence from the COVID-19 Pandemic

Author

Listed:
  • Fei Fang

    (School of Business, Clark University, 950 Main St., Worcester, MA 01610, USA
    Fei Fang is also a research associate at the Center for International Securities and Derivatives Markets (CISDM), University of Massachusetts Amherst.)

  • Sitikantha Parida

    (School of Business, Clark University, 950 Main St., Worcester, MA 01610, USA)

Abstract

Sustainable investing has grown rapidly, but it remains unclear whether actively managed sustainable funds outperform passive ones. This study compares the performance of high-sustainable active U.S. equity mutual funds and their index peers from September 2018 to April 2022, dividing the period into pre-crash, crash, and post-crash phases around the COVID-19 market downturn. On average, both active and index funds underperform, with the sharpest losses occurring during the crash. High-sustainable funds outperform low-sustainable ones, particularly during the crash. However, high-sustainable active funds do not outperform their passive counterparts in any period. These results suggest that active management does not offer greater downside protection and raise questions about the higher fees typically charged by actively managed sustainable funds.

Suggested Citation

  • Fei Fang & Sitikantha Parida, 2025. "Do Active Sustainable Equity Funds Outperform Their Passive Peers? Evidence from the COVID-19 Pandemic," JRFM, MDPI, vol. 18(10), pages 1-16, September.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:10:p:530-:d:1755814
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/10/530/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/10/530/
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:18:y:2025:i:10:p:530-:d:1755814. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.