The urge to act : a comparison of active and passive socially responsible investment funds in the United States
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Innovative finance vehicles are required to facilitate the transition towards a sustainable society. Here, we investigate two very successful innovations in the fund industry, namely, the index mutual funds and the passively managed exchange traded funds (ETFs). We study socially responsible investment funds in the US and particularly focus on their financial performance, cost of investing, and degree of active management. We do not find persuasive evidence that the actively managed funds perform better than their passively managed counterparts do. Furthermore, we find that some active SRI funds seem to operate as ‘closet indexers’ with a low degree of active management. We conclude that passively managed socially responsible funds have the potential to enrich the spectrum of financial products that may help advance the sustainability transition.
Chen , X & Scholtens , B 2018 , ' The urge to act : a comparison of active and passive socially responsible investment funds in the United States ' , Corporate Social Responsibility and Environmental Management , vol. 25 , no. 6 , pp. 1154-1173 . https://doi.org/10.1002/csr.1529
Corporate Social Responsibility and Environmental Management
Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment. This work has been made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at: https://doi.org/10.1002/csr.1529
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