ESG Favoritism in Mutual Fund Families

Anna Zsofia Csiky; Rainer Jankowitsch; Alexander Pasler; Marti G. Subrahmanyam

doi:10.2139/ssrn.4986724

ESG Favoritism in Mutual Fund Families

Anna Zsofia Csiky, Rainer Jankowitsch, Alexander Pasler, Marti G. Subrahmanyam

Institute for Finance, Banking and Insurance

Publication: Working/Discussion Paper › Working Paper/Preprint

Abstract

We investigate whether mutual fund families favor their ESG funds at the expense of their non-ESG siblings. We find that the net-of-style return spread of ESG compared to non-ESG funds within the fund family is significantly greater than the gap with non-ESG matches outside the family. The difference is around 2% per year, indicating sizable cross-fund subsidization that is mainly used to avoid underperformance of ESG funds. We link these differences to various fund and family characteristics and relate the observed effects to measures of environmental awareness and fund flows. Additionally, we investigate potential mechanisms of ESG favoritism.

Original language	English
Number of pages	53
DOIs	https://doi.org/10.2139/ssrn.4986724
Publication status	Published - 14 Oct 2024

Keywords

ESG
mutual funds
mutual fund family
cross-fund subsidization

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ESG Favoritism in Mutual Fund Families
Csiky, A. Z. (Speaker), Jankowitsch, R. (Contributor), Pasler, A. (Contributor) & Subrahmanyam, M. G. (Contributor)
12 Dec 2024
Activity: Talk or presentation › Science to science
ESG Favoritism in Mutual Fund Families
Csiky, A. Z. (Contributor), Jankowitsch, R. (Contributor), Pasler, A. (Speaker) & Subrahmanyam, M. G. (Contributor)
2 Dec 2024
Activity: Talk or presentation › Science to science
ESG Favoritism in Mutual Fund Families
Csiky, A. Z. (Speaker), Jankowitsch, R. (Contributor), Pasler, A. (Contributor) & Subrahmanyam, M. G. (Contributor)
3 Oct 2024
Activity: Talk or presentation › Science to science

Cite this

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ESG Favoritism in Mutual Fund Families

Abstract

Keywords

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