Socially Responsible Investing and Portfolio Diversification

Posted: 22 Nov 2004

See all articles by Zakri Y. Bello

Zakri Y. Bello

Central Connecticut State University - Finance

Abstract

I use a sample of socially responsible stock mutual funds matched to randomly selected conventional funds of similar net assets to investigate differences in characteristics of assets held, portfolio diversification, and variable effects of diversification on investment performance. I find that socially responsible funds do not differ significantly from conventional funds in terms of any of these attributes. Moreover, the effect of diversification on investment performance is not different between the two groups. Both groups underperform the Domini 400 Social Index and S&P 500 during the study period.

Keywords: Socially responsible, portfolio diversification

JEL Classification: G12, G20, G23

Suggested Citation

Bello, Zakri Y., Socially Responsible Investing and Portfolio Diversification. Journal of Financial Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=524962

Zakri Y. Bello (Contact Author)

Central Connecticut State University - Finance ( email )

1615 Stanley Street P.O. Box 4010
New Britian, CT 06050-4010
United States
860-832-3262 (Phone)

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