Journal of Business Ethics

, Volume 124, Issue 4, pp 551–569 | Cite as

Environmental Mutual Funds: Financial Performance and Managerial Abilities

  • Fernando Muñoz
  • Maria Vargas
  • Isabel Marco


This article analyzes the financial performance and managerial abilities of a sample of US and European socially responsible (SR) mutual funds. The period analyzed commences from January 1994 and concludes in January 2013 and yields 18 US and 89 European green funds. The results obtained for green fund managers are compared with those achieved for conventional and other forms of SR mutual fund managers. We control for the mutual fund investment objective (distinguishing between domestic and global portfolios) and for the effect of crisis market periods. For US SR funds, partitioning the data into crisis and normal periods reveals that SR funds obtain statistically insignificant performance in crisis periods but underperform relative to the market in normal periods. Furthermore, the findings indicate that green funds do not perform worse than other forms of SR mutual funds. For European SR funds partitioning the data into crisis and normal periods reveals that SR funds obtain statistically insignificant performance irrespective of market conditions. Similar to the US findings, green Europe SR funds do not perform worse than other forms of SR mutual funds. Managerial abilities are not evident in the findings though unsuccessful timing of the market is revealed for both Europe and US global green funds. When analyzing managerial abilities in crisis and non-crisis market periods, US green fund managers achieve better results in crisis market periods and the opposite occurs for green fund managers in European market.


Environmental mutual funds Financial performance Green investment Market-timing Stock-picking Style-timing 



European Central Bank


Environmental, Social, and Governance


European Union


The European Sustainable Investment Forum


Gregory and Whittaker (2007)


Treynor and Mazuy (1966)


Total net assets


Socially responsible


Socially responsible investment


United States


United States Social Investment Forum

JEL Classification

G11 G23 Q56 



The authors would like to express our acknowledgements to Aragon’ Government by the funding received as Public and Official Research Group (GIECOFIN).


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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Centro Universitario de la Defensa de ZaragozaSaragossaSpain
  2. 2.Departamento de Contabilidad y FinanzasUniversidad de ZaragozaSaragossaSpain

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