Business and Society

Ethical mutual funds catch up with conventional funds

January 28, 2008 | 1 min read

The study “International Evidence on Ethical Mutual Fund Performance and Investment Style” (2002) does, however, show a “learning effect”. After a period of strong under-performance, older ethical funds catch up with conventional funds. The more recently launched ones continue to under-perform both the index and conventional peers for a period of time [an asset size variable would have been informative here].

The authors also note that screened social indexes “are less powerful in explaining fund performance compared to standard, non-ethical indexes.”

This paper won the 2002 Moskowitz Prize competition, awarded by the Social Investment Forum. The Moskowitz Prize, which in 2004 became an initiative of the Center for Responsible Business at the University of California, Berkeley, promotes the concept, practice, and growth of socially responsible investing.


This article was previously published on, January 28, 2008.

This article may be reproduced according to our terms of use with attribution (and link, if online) to To be cited as: “Ethical mutual funds catch up with conventional funds”, Lloyd Kurtz, and Ingrid Ramaan,, January 28, 2008.

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Research Paper


Kees Koedijk
Professor of Financial Management, Tilburg University and Dean of TiSEM

Rob Bauer
Rob Bauer is Professor of Finance, Maastricht University

Ingrid Ramaan
Administrative Editor FSinsight

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