Sustainability Ratings and Mutual Fund Flows: Investors’ Reaction in Europe

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School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.

Authors

Date

2018

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

24

Series

Abstract

Earlier study presented strong relation between Morningstar Sustainability Ratings and mutual fund flows in US markets. Investors shifted wealth from low rated funds into the high rated funds. I study the same effect in the universe of European domiciled open end-funds. Results of this study shows that investors’ reaction differs, and European investors were not as interested in Morningstar’s method to rate funds in terms of sustainability. However, there seems to be evidence that investors might have punished the low rated funds more than they were willing to invest into the high rated funds. The evidence is consistent with the earlier studies that have shown the investors disregard towards investments that are not in line with their social norms

Description

Thesis advisor

Spickers, Theresa

Keywords

fund flows, sustainability, investor behavior, mutual funds

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Citation

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https://urn.fi/URN:NBN:fi:aalto-201902171678

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[kand] Kauppakorkeakoulu / BIZ