Socially Responsible Investing and Mutual Funds – A Good Match? A Performance Evaluation of American Mutual Funds Pursuing SRI

Abstrakt

This study sets out to evaluate the performance of actively managed mutual funds in the American financial industry. Specifically, the study investigates what happens in the cases when actively managed mutual funds pursue a socially responsible investment strategy, and in this case, determine whether such funds are able to outperform the market. With the advancement of CSR, socially responsible investing slowly gained a foothold in the world of investment. As soon as a new term is coined it is researched to determine if any significance can be assigned to the theory. To address the above paradox, the present study seeks to clarify what happens in the cases when actively managed mutual funds pursue a socially responsible investment strategy. A number of American mutual funds have been analyzed for this purpose. It should be noted the result is based on a limited sample, which could not be randomly picked. The ability to generalize the result beyond funds with similar investment strategies may therefore be limited. The outcome of this analysis is that American mutual funds pursuing a socially responsible investment strategy do not appear to outperform the market. However, there is evidence that mutual funds within this investment strategy perform better than the market during a crisis.