Evaluating the Performance of Ethical and Non-ethical Funds: A Matched Pair Analysis


  • N. Kreander,

    Corresponding authorSearch for more papers by this author
  • R.H. Gray,

  • D.M. Power,

  • C.D. Sinclair

    Search for more papers by this author
    • The authors are respectively a Lecturer at the University of Glasgow, Professor of Accounting at the University of Glasgow, Professor of Business Finance at the University of Dundee and a Senior Lecturer at the University of Dundee. Helpful comments from Bruce Burton, Jo Danbolt and William Forbes and funding from the Fortum Foundation is gratefully acknowledged.

†N. Kreander, The Department of Accountancy & Finance, The University of Glasgow, 65-71 Southpark Avenue, Glasgow G12 8LE, UK.
e-mail: n.kreander@accfin.gla.ac.uk


Abstract:  This paper studies the performance of 60 European funds from four countries. The paper extends the UK matched pair approach for fund evaluation developed by Mallin et al. (1995) to a European setting. The findings suggest that there is no difference between ethical and non-ethical funds according to the performance measures employed. Neither type of fund displayed any ability to time the market. Finally, the results indicate that the management fee is a significant explanatory variable for the Jensen measure as Chen et al. (1992) and Grinblatt and Titman (1994) suggested.