The Impact of Ethical Rating on Canadian Security Performance: Portfolio Management and Corporate Governance Implications

29 Pages Posted: 24 Sep 2007

See all articles by Klaus P. Fischer

Klaus P. Fischer

affiliation not provided to SSRN

Nabil Khoury

University of Quebec at Montreal (UQAM) - Faculty of Management (ESG)

Abstract

One approach that is gaining in popularity among portfolio managers uses ethical ratings, published by specialized research organizations, to screen securities for portfolio selection. Portfolio managers can thus gain a better understanding of the phenomenon and adopt a better and more consistent approach to ethical investment. By the same token, board of directors can measure the impact of their ethical policies on the market performance of the stock of their company. This paper provides new evidence about the impact of ethical ratings published in Canada on the risk-adjusted returns of the securities concerned, within the framework of a multi-factor Capital Asset Pricing Model, and gives an interpretation of the results from the perspective of portfolio composition and of corporate governance.

Keywords: Ethical investing, Ethical rating, Ethical portfolio management

JEL Classification: G12

Suggested Citation

Fischer, Klaus P. and Khoury, Nabil, The Impact of Ethical Rating on Canadian Security Performance: Portfolio Management and Corporate Governance Implications. Available at SSRN: https://ssrn.com/abstract=664663 or http://dx.doi.org/10.2139/ssrn.664663

Klaus P. Fischer

affiliation not provided to SSRN

Nabil Khoury (Contact Author)

University of Quebec at Montreal (UQAM) - Faculty of Management (ESG) ( email )

Case postale 8888
Succursale Centre-ville
Montreal, Quebec H3C 3P8
Canada
514-987-3000 x6717 (Phone)

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