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Do Socially Responsible Fund Managers Really Invest Differently?


  • Karen Benson


  • Timothy Brailsford
  • Jacquelyn Humphrey


To date, research into socially responsible investment (SRI), and in particular the socially responsible investment funds industry, has focused on whether investing in SRI assets has any differential impact on investor returns. Prior findings generally suggest that, on a risk-adjusted basis, there is no difference in performance between SRI and conventional funds. This result has led to questions about whether SRI funds are really any different from conventional funds. This paper examines whether the portfolio allocation across industry sectors and the stock-picking ability of SRI managers are different when compared to conventional fund managers. The study finds that SRI funds exhibit different industry betas consistent with different portfolio positions, but that these differences vary from year to year. It is also found that there is little difference in stock-picking ability between the two groups of fund managers. Copyright Springer 2006

Suggested Citation

  • Karen Benson & Timothy Brailsford & Jacquelyn Humphrey, 2006. "Do Socially Responsible Fund Managers Really Invest Differently?," Journal of Business Ethics, Springer, vol. 65(4), pages 337-357, June.
  • Handle: RePEc:kap:jbuset:v:65:y:2006:i:4:p:337-357
    DOI: 10.1007/s10551-006-0003-8

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    References listed on IDEAS

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    7. Catherine M. Paul & Donald Siegel, 2006. "Corporate social responsibility and economic performance," Journal of Productivity Analysis, Springer, vol. 26(3), pages 207-211, December.
    8. Anand Mohan Goel, 2003. "Why Do Firms Smooth Earnings?," The Journal of Business, University of Chicago Press, vol. 76(1), pages 151-192, January.
    9. Bhattacharya, Utpal & Daouk, Hazem & Welker, Michael, 2003. "The World Price of Earnings Opacity," Working Papers 127185, Cornell University, Department of Applied Economics and Management.
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