The Performance of Socially Responsible Mutual Funds: The Role of Fees and Management Companies Articles uri icon

publication date

  • June 2010

start page

  • 243

end page

  • 263


  • 2


  • 94

International Standard Serial Number (ISSN)

  • 0167-4544

Electronic International Standard Serial Number (EISSN)

  • 1573-0697


  • In this article, we shed light on the debate about the financial performance of socially responsible investment (SRI) mutual funds by separately analyzing the contributions of
    before-fee performance and fees to SRI funds' performance, and by
    the role played by fund management companies in the
    determination of those variables. We apply the matching estimator
    to obtain our results and find that in the period 1997&-2005,
    US SRI funds had better before- and after-fee performance than
    conventional funds with similar characteristics. The
    differences, however, are driven exclusively by SRI funds run by
    companies specialized in SRI. While these funds
    significantly outperform similar conventional funds, funds run by
    not specialized in SRI underperform their matched
    conventional funds. We find no significant differences in fees between
    and conventional funds except in one case: SRI funds are
    cheaper than conventional funds run by the same management company.