Sustainable mutual fund performance and flow in the recent years through the COVID-19 pandemic

Fei Fang and Sitikantha Parida

International Review of Financial Analysis, 2022, vol. 84, issue C

Abstract: Sustainable investing has gained significant momentum over the past few years. In this paper, we study the performance and flows of sustainable equity mutual funds in recent years through the COVID-19 pandemic. We find that the high-sustainable funds perform better than the low-sustainable ones by between 1.32% and 6.96% annually. This outperformance significantly increases during the COVID-19 pandemic-induced market crash and the post-crash pandemic. Similarly, we find that high-sustainable funds attract significantly more investments (or suffer less outflow) than the low-sustainable funds by between 5.28% and 5.76% per annum. These flow differences increase considerably during the market crash, consistent with the ‘flight-to-quality’ effect. We also find that the high-sustainable funds attract significantly more investment during the post-crash pandemic than before the crash. This suggests that investors consider sustainable investing a necessity (not a luxury good), and their taste/attitude towards sustainable investing has changed – now they prioritize ‘investing with a conscience.’

Keywords: Sustainability; Mutual funds; Performance; Flow; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: G11 G23 M14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521922003374
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:84:y:2022:i:c:s1057521922003374

DOI: 10.1016/j.irfa.2022.102387

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().