Households' investments in socially responsible mutual funds

Charlotte Christiansen, Thomas Jansson, Malene Kallestrup-Lamb and Vicke Noren

The Quarterly Review of Economics and Finance, 2023, vol. 87, issue C, 46-67

Abstract: We use a large administrative panel data set to study which characteristics are related to households’ investments in socially responsible investing (SRI) mutual funds. To isolate financial and non-financial preferences for SRI investments, we distinguish between two types of SRI funds; ESG and charitable funds. We also analyze to what extent liquid wealth and age play a role in allocation of SRI funds. We find that participation in SRI funds is lower for young and retired investors. Moreover, we find that young adults are more likely to be ESG investors, while retired investors are more likely to participate in charitable funds. Further, liquid wealth is important for SRI participation but becomes less relevant once investors have sufficient liquid wealth. For the exposure to SRI funds, the overall picture is quite different as it is negatively related to wealth, income, risky share, and education. The relationship between investors’ characteristics and the returns on their conventional fund portfolio are similar for conventional and SRI investors. Our analysis indicates that SRI investors might have non-financial objectives for their SRI investments. Finally, we find that, on average, SRI investors earn higher returns on their total fund portfolio compared to conventional investors.

Keywords: Household finance; Portfolio choice; Retail investors; SRI investments (search for similar items in EconPapers)
JEL-codes: D14 D31 D64 G11 G51 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062976922001326
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:quaeco:v:87:y:2023:i:c:p:46-67

DOI: 10.1016/j.qref.2022.11.005

Access Statistics for this article

The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty

More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().