Socially Responsible Investment Funds: Investor Reaction to Current and Past Returns

22 Pages Posted: 21 Jul 2007 Last revised: 20 Feb 2008

See all articles by Karen L. Benson

Karen L. Benson

University of Queensland - Business School; Financial Research Network (FIRN)

Jacquelyn Humphrey

University of Queensland - Business School

Date Written: July 2007

Abstract

This paper investigates and compares the determinants of fund flows for socially responsible investment (SRI) funds and conventional funds. We consider the impact of current and past measures of monthly and annual return on fund flow. The results suggest SRI fund flows are less sensitive to returns than conventional funds. Our model also shows that flow is persistent and SRI investors are more likely to invest in a fund they already own relative to conventional investors. These results reflect the difficulty SRI investors face in finding alternative investments that meet their non-financial goals.

Keywords: Socially responsible investment funds, fund flows

JEL Classification: G11, G23

Suggested Citation

Benson, Karen L. and Humphrey, Jacquelyn, Socially Responsible Investment Funds: Investor Reaction to Current and Past Returns (July 2007). Journal of Banking and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1001372 or http://dx.doi.org/10.2139/ssrn.1001372

Karen L. Benson (Contact Author)

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Jacquelyn Humphrey

University of Queensland - Business School ( email )

4072 Brisbane Queensland
Australia

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