 Product differentiation in the socially responsible mutual fund industryMercedes Alda, Fernando Muñoz and Maria Vargas Journal of Multinational Financial Management, 2022, vol. 64, issue C Abstract: In this study, we analyse the effect of product differentiation on prices and client attraction in the socially responsible (SR) mutual fund industry. Using three proxies for differentiation, including a text-based indicator, a return-based indicator, and a portfolio-holding indicator, we analyse a sample of US SR equity mutual funds in the period 1999–2019. Our findings show that the text differentiation measure better explains the product differentiation impact on prices and flows than the measures based on fund characteristics. Our text differentiation results indicate that younger SR funds and funds belonging to smaller families are more differentiated. In addition, differentiation allows SR funds to charge higher fees and attract more money flows. Finally, our results indicate that SR fund investors are sensitive to differentiation regarding other funds implementing the same SR strategies, but not in relation to other funds in the same Morningstar financial style category. Keywords: Differentiation; Money flows; Net expense ratio; Socially responsible mutual funds (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:64:y:2022:i:c:s1042444x22000020 DOI: 10.1016/j.mulfin.2022.100730 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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