Performance Evaluation of Socially Responsible Funds Compared to Their Benchmark Index in India: Evidence from the Covid-19 Crisis

Renu Jonwall (), Seema Gupta () and Shuchi Pahuja ()
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Renu Jonwall: University of Delhi
Seema Gupta: Amity University
Shuchi Pahuja: University of Delhi

Asia-Pacific Financial Markets, 2025, vol. 32, issue 2, No 6, 489-523

Abstract: Abstract This study aimed at differentiating the qualitative characteristics (Basic and Technical) of the Indian Socially Responsible (SR) funds. The study also compared the performance of SR funds with their benchmark indexes. The novelty of the current study is analyzing the impact of the market return and the Covid-19 outbreak on the returns of SR funds. The study used content analysis, independent t-test, and multiple linear regression analysis. The content analysis results highlighted that the majority of the SR funds adopt the Environmental, Social and Governance (ESG) integration approach, invest in large-cap, high-growth companies with good ESG score, and have an investment committee. The comparative analysis indicated that out of 14 SR funds, only four funds outperformed their benchmark index. The regression analysis showed that the selected four funds had a significant relationship with their respective benchmarks and a non-significant relationship with the Covid-19 outbreak. The current study contributes to SRI literature by identifying the differentiating characteristics of the Indian SR funds. It also contributes to the extant literature a comparative analysis, assessing the performance of the SR funds with their benchmark index. Further, determining the impact of the market return and the Covid-19 outbreak on the returns of SR fund is also a contributing factor of the present study. Findings are useful for individual investors, institutional investors and fund managers, as they can launch more SR funds on similar terms. Findings are useful for regulators and policymakers for framing new rules and regulations for boosting ESG adoption by the companies.

Keywords: Content analysis; Covid-19; ESG funds; India; Jensen’s alpha; Socially responsible funds (search for similar items in EconPapers)
JEL-codes: G11 G20 G23 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10690-024-09460-z

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