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Money-flows of socially responsible investment funds around the world
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Renneboog, Luc, Ter Horst, Jenke and Zhang, Chendi (2012) Money-flows of socially responsible investment funds around the world. In: Nofsinger, J. and Baker , K., (eds.) Socially Responsible Finance and Investing. Robert W. Kolb Series in Finance . Hoboken ; USA: Wiley-Blackwell Publishing Ltd., pp. 455-477.
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Official URL: http://dx.doi.org/10.1002/9781118524015.ch24
Abstract
This chapter studies the money flows into and out of socially responsible investment (SRI) funds around the world. In their investment decisions, investors in SRI funds may be more concerned with ethical or social issues than with fund performance. Therefore, SRI money flows are less related to past fund returns. Ethical money is less sensitive to past negative returns than are conventional fund flows, especially when SRI funds primarily use negative or sin/ethical screens. Social attributes of SRI funds weaken the relationship between money inflows and past positive returns. However, money flows into funds with environmental screens are more sensitive to past positive returns than are conventional fund flows. Stock picking based on in-house SRI research increases the money flows. These results give evidence on the role of nonfinancial attributes, which induce heterogeneity of investor clienteles within SRI funds. No evidence of a smart money effect is found, as the funds that receive more inflows neither outperform nor underperform their benchmarks or conventional funds.
Item Type: | Book Item | ||||
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Subjects: | H Social Sciences > HG Finance | ||||
Divisions: | Faculty of Social Sciences > Warwick Business School | ||||
Library of Congress Subject Headings (LCSH): | Mutual funds, Investments--Moral and ethical aspects | ||||
Series Name: | Robert W. Kolb Series in Finance | ||||
Publisher: | Wiley-Blackwell Publishing Ltd. | ||||
Place of Publication: | Hoboken ; USA | ||||
Book Title: | Socially Responsible Finance and Investing | ||||
Editor: | Nofsinger, J. and Baker , K. | ||||
Official Date: | 2012 | ||||
Dates: |
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Page Range: | pp. 455-477 | ||||
DOI: | 10.1002/9781118524015.ch24 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Restricted or Subscription Access |
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