Seminar Cancelled

Speaker: Prof. Nandita Das, College of Business, Delaware State University

Title:Is there a difference in ESG fund performance among different economies?

This is joint work with Prof. Aman Sunder, Dean of the Graduate School, College for Financial Planning, Centennial CO

Abstract: Public preference for Socially Responsible practices has grown exponentially over the past two decades. According to USSIF the estimated assets under management for SRMF was close to $17 trillion in 2019. Assets are poised to reach $41 trillion by the end of this year according to Bloomberg Intelligence estimates. Money held in sustainable mutual funds and ESG-focused exchange-traded funds rose globally by 53% in 2021 to $2.7 trillion according to Morningstar Inc. The AUM of ESG Funds in India is currently at Rs. 11,956 crores as per AMFI as of Mar 31, 2022.

This paper examines the risk-adjusted performance for socially responsible mutual funds (SRMF) in two different economies- US and India. Investors from different countries will probably weigh each of ESG criterion differently. The goal is to compare the performance of ESG funds based on overall score and specific criterion scores of a developed country with a developing country. We compare the results of funds with a high ESG rating in a developed country (US) with those in a developing country (India). For example, in US it appears that Environment factor is more crucial to investors, and it is possible that Governance might be a bigger factor in a developing country. As for the comparability of performance, there is no statistical difference in performance between the two economies for top-rated funds. This is not the case for the bottom-rated funds. The findings also show size to be a priced risk-factor for both the economies.