Are investors aware of climate-related transition risks? Evidence from mutual fund flows

Juan Reboredo and Luis A. Otero

Ecological Economics, 2021, vol. 189, issue C

Abstract: Using information on climate transition risks embedded in US equity mutual fund portfolios, we report evidence that mutual fund investors consider climate-related transition risk to be an undesirable fund feature and accordingly allocate more money to funds with lower climate-related transition risk. The size of the impact of this risk on fund flows differs depending on the performance expectations of investors and the socially responsible focus and sustainability of the fund. Our results suggest that mutual fund investors are aware of climate-related transition risks as evidenced by their investment decisions.

Keywords: Climate transition risk; Low-carbon economy; Mutual fund flows (search for similar items in EconPapers)
JEL-codes: G11 G23 G32 Q54 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:189:y:2021:i:c:s0921800921002068

DOI: 10.1016/j.ecolecon.2021.107148

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