Is there a green fund premium? Evidence from twenty seven emerging markets

Bushra Naqvi, Nawazish Mirza, Syed Kumail Abbas Rizvi, Małgorzata Porada-Rochoń and Rania Itani

Global Finance Journal, 2021, vol. 50, issue C

Abstract: The popularity of green energy-based investments has spurred, notably during the last decade. This is mainly due to the positive socio-economic externalities and an increase in the financing flow. This paper assesses the financial performance and managerial abilities of green funds and their conventional peers. Using a comprehensive data set of 2339 funds across twenty-seven emerging markets, we report that traditional energy funds outperform renewable funds. Further, while conventional fund managers exhibit market and volatility timing, we cannot deduce any support for the same in the case of renewables. These results indicate disincentives for investors who would like to go green. Finally, the performance of renewable funds degraded during Covid-19, highlighting the additional investment drag. We propose that immediate legislative, governance, and regulatory interventions are warranted to promote a sustainable financial system.

Keywords: Green finance; Renewables; Market timing; Volatility timing (search for similar items in EconPapers)
JEL-codes: G10 G11 G12 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:50:y:2021:i:c:s1044028321000545

DOI: 10.1016/j.gfj.2021.100656

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