The Journal of Finance· 2017Q1
Why Do Investors Hold Socially Responsible Mutual Funds?
- 1,357citations
- Q1SCImago
- 2017year
Short summary
Investors hold socially responsible mutual funds primarily due to social preferences and a desire for social signaling, not financial motives, as they expect lower returns and pay higher fees for these funds.
AI-generated from the title and abstract; the full text is not read.
Key points
- Social preferences are a key driver for holding SRI funds.
- Social signaling also explains SRI fund investment decisions.
- Financial motives play a minor role in SRI fund choices.
- SRI investors expect lower returns and pay higher fees than for conventional funds.
AI-generated from the title and abstract; the full text is not read.
Abstract
ABSTRACT To understand why investors hold socially responsible mutual funds, we link administrative data to survey responses and behavior in incentivized experiments. We find that both social preferences and social signaling explain socially responsible investment (SRI) decisions. Financial motives play less of a role. Socially responsible investors in our sample expect to earn lower returns on SRI funds than on conventional funds and pay higher management fees. This suggests that investors are willing to forgo financial performance in order to invest in accordance with their social preferences.
The authors' abstract, as published at the source. The Journal of Finance, 2017 · DOI ↗
Continue with a free account
Ask the paper: 3 free questions a day about this paper; save it, get its citation, new summaries every day for your field. Takeaways are Premium.
Continue free on the webSign in with Google or Apple; no card needed. You come back to this paper.
On your phone:
Field: Safety Research
Safety ResearchSocial Sciences