Investor and Management Commitment in Socially Responsible Mutual Funds

Abstract

We explore the behavior of investors and managers of socially responsible mutual funds in order to gain insight into their commitment to ethical investing. Management fees, fund turnover, loads, and fund flows are contrasted between matched samples of ethical and traditional mutual funds. Our findings indicate that both managers and investors exhibit commitment in that they appear willing to sacrifice fee revenue and financial returns, respectively, for their ethical goals.