One of the astonishing new developments in the financial community is the rise of ethicalinvestments during the last decade. Particularly, the recent financial crisis has determined a majorattention towards an ethically oriented finance based on social investments and environmental benefitsthat can create greater corporate crisis prevention. Because of the sheer size and importance of theethical mutual funds, we thought to compare the ethical and non ethical mutual funds.The aim of this study is to describe the ethical and non ethical mutual funds under Italian and foreignlaw highlighting how some factors, such as performance, typology (equity, balanced, fixed income),geographic location, management fees, characterize these funds in different way.The analysis has been carried out collecting a data set of 219 mutual funds published onwww.morningstar.com. The data set is subdivided in 109 ethical mutual funds and 110 non ethicalmutual funds. The study uses a multi-disciplinary approach and it is led by a Multiple CorrespondenceAnalysis (MCA) which puts in evidence the principal characteristics of the mutual funds by theirprojection on a factorial plane. Later the multivariate analysis carries out typologies of mutual fundsclusters with particular characteristics by a Cluster Analysis.The study confirms the existence of different characteristics with reference to the ethical and nonethical mutual funds. Particularly, it puts in evidence three groups of funds which are insidehomogeneous but heterogeneous between them by the characteristics considered. The first groups,defined “negative ethical performance”, is composed of 152 funds. The second groups, named“positive non ethical performance”, is characterized by non ethical fund (50.23% of them is present inthis group). The third cluster is called “young funds” and it is composed of funds born in the period2005-2008.Finally, the results indicate that the ethical funds are different from the non ethical funds with regardsto the performance and put in evidence that the ethical funds governed the financial crisis triggered bysubprime in a better way than the non ethical funds. Consequently we argue that it is important that theinterests of the financial community are addressed to the development and promotion of ethically oriented finance and of its instruments.
The ethical and non ethical mutual funds comparison
ADAMO, Rosa;
2010-01-01
Abstract
One of the astonishing new developments in the financial community is the rise of ethicalinvestments during the last decade. Particularly, the recent financial crisis has determined a majorattention towards an ethically oriented finance based on social investments and environmental benefitsthat can create greater corporate crisis prevention. Because of the sheer size and importance of theethical mutual funds, we thought to compare the ethical and non ethical mutual funds.The aim of this study is to describe the ethical and non ethical mutual funds under Italian and foreignlaw highlighting how some factors, such as performance, typology (equity, balanced, fixed income),geographic location, management fees, characterize these funds in different way.The analysis has been carried out collecting a data set of 219 mutual funds published onwww.morningstar.com. The data set is subdivided in 109 ethical mutual funds and 110 non ethicalmutual funds. The study uses a multi-disciplinary approach and it is led by a Multiple CorrespondenceAnalysis (MCA) which puts in evidence the principal characteristics of the mutual funds by theirprojection on a factorial plane. Later the multivariate analysis carries out typologies of mutual fundsclusters with particular characteristics by a Cluster Analysis.The study confirms the existence of different characteristics with reference to the ethical and nonethical mutual funds. Particularly, it puts in evidence three groups of funds which are insidehomogeneous but heterogeneous between them by the characteristics considered. The first groups,defined “negative ethical performance”, is composed of 152 funds. The second groups, named“positive non ethical performance”, is characterized by non ethical fund (50.23% of them is present inthis group). The third cluster is called “young funds” and it is composed of funds born in the period2005-2008.Finally, the results indicate that the ethical funds are different from the non ethical funds with regardsto the performance and put in evidence that the ethical funds governed the financial crisis triggered bysubprime in a better way than the non ethical funds. Consequently we argue that it is important that theinterests of the financial community are addressed to the development and promotion of ethically oriented finance and of its instruments.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
