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What matters to SRI investors?

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  • Osthoff, Peer

Abstract

In this paper I investigate the investment behavior of SRI investors based on SRI mutual fund flows. Specifically, I analyze how SRI investors react to past performance and ethical standards. This empirical study shows that over the years along with the development of the SRI fund market, the performance sensitivity of SRI investors has increased. Today, SRI investors chase past top performing funds at least as much as conventional investors do. Besides performance, SRI investors care about the actual ethical standards of SRI funds. SRI funds with high ethical standards regarding the positive rating and especially regarding environment attract higher inflows. I also find that SRI investors are more likely to reinvest in the same fund. Overall, I conclude that, like conventional investors, nowadays SRI investors chase previously top performing funds, but additionally pay attention to the actual ethical standards of their investments.

Suggested Citation

  • Osthoff, Peer, 2008. "What matters to SRI investors?," CFR Working Papers 08-07, University of Cologne, Centre for Financial Research (CFR).
    • Handle: RePEc:zbw:cfrwps:0807
    as

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    References listed on IDEAS

    as
    1. Diane Del Guercio & Paula A. Tkac, 2000. "The determinants of the flow of funds of managed portfolios: mutual funds versus pension funds," FRB Atlanta Working Paper 2000-21, Federal Reserve Bank of Atlanta.
    2. Michael Schröder, 2007. "Is there a Difference? The Performance Characteristics of SRI Equity Indices," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(1‐2), pages 331-348, January.
    3. Guercio, Diane Del & Tkac, Paula A., 2002. "The Determinants of the Flow of Funds of Managed Portfolios: Mutual Funds vs. Pension Funds," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 37(4), pages 523-557, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Socially Responsible Mutual Funds; Socially Responsible Investing; Ethical Investment;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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