Mutual fund trading and ESG stock resilience during the Covid-19 stock market crash
Rui Albuquerque (),
Yrjo Koskinen () and
Raffaele Santioni ()
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Rui Albuquerque: Carroll School of Management, Boston College, ECGI, CEPR
Yrjo Koskinen: Haskayne School of Business, University of Calgary, ECGI
Raffaele Santioni: Bank of Italy
No 1371, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area
Using proprietary monthly holdings data from Morningstar, we show that Environmental, Social, and Governance fundsâ€™ trading during the Covid-19 market crash was consistent with the choices of their clientele. Thus, ESG funds helped to stabilize the market for ESG stocks, but interestingly non-ESG funds did so too. First, all funds experiencing inflows helped to stabilize the market during the crash by increasing net purchases per dollar of inflows. This behaviour was more pronounced for ESG funds. Second, non-ESG funds experiencing outflows increased their net sales per dollar of outflow for non-ESG stocks, tilting their portfolios towards ESG stocks.
Keywords: Environmental and social responsibility; clientele effects; fund flows; investor horizon; stock market crash (search for similar items in EconPapers)
JEL-codes: G01 G12 G23 G32 M14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env and nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1371_22
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