22. SRI Mutual Fund and Index Performance

  1. H. Kent Baker and
  2. John R. Nofsinger
  1. Halil Kiymaz

Published Online: 12 SEP 2012

DOI: 10.1002/9781118524015.ch22

Socially Responsible Finance and Investing: Financial Institutions, Corporations, Investors, and Activists

Socially Responsible Finance and Investing: Financial Institutions, Corporations, Investors, and Activists

How to Cite

Kiymaz, H. (2012) SRI Mutual Fund and Index Performance, in Socially Responsible Finance and Investing: Financial Institutions, Corporations, Investors, and Activists (eds H. K. Baker and J. R. Nofsinger), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118524015.ch22

Author Information

  1. Bank of America Chair and Professor of Finance, Rollins College

Publication History

  1. Published Online: 12 SEP 2012
  2. Published Print: 28 AUG 2012

ISBN Information

Print ISBN: 9781118100097

Online ISBN: 9781118524015

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Keywords:

  • SRI;
  • mutual funds;
  • SRI index performance

Summary

This chapter provides a review of the literature on socially responsible investing (SRI) with particular emphasis on empirical evidence of mutual fund and index performance. SRI is no longer a negligible segment of international capital markets. During the last two decades, SRI has increased sharply, reflecting the changes in investor sensitivities in social, environmental, and ethical issues. The main issue for firms is whether providing a risk-adjusted return to investors is possible while being socially or ethically responsible. Although the issue is far from being resolved, the existing literature tends to report that a cost is associated with investors willing to invest in SRI. Further, investors appear to accept lower performance to seek their moral choice of investment.