Ethical mutual funds performance

In the context of the measurement of the performance of ethical mutual funds, this fact has an unrealistic consequence, that does not satisfy the usual economic assumptions on the investors preferences.

A data envelopment analysis approach to measure the mutual fund performance. However, this is not what happens with the DEA model. Morningstar India Private Limited; Regd.

This indicates that the compromise made with respect to diversification by investing in ethical funds was well rewarded in terms of Ethical mutual funds performance returns in Indian context.

Input and output data and DEA performance measures for the UK ethical and non ethical mutual funds obtained with model 25 This model is applied to Italian data in [4].

How to rate management of investment funds. In this paper we tackle the problem of the presence of negative average rate of returns in the computation of the performance of ethical mutual funds. We have used such information in order to define an ethical measure by assigning each ethical feature a weight and then computing their weighted sum.

In this paper we tackle the problem of the presence of negative average rate of returns both in the computation of numerical performance indicators and from the point of view of its consequences on the significance of the outcomes of a DEA model.

In addition, the model can take into Ethical mutual funds performance among the inputs also the initial and exit fees f I j and f E j usually required by an investment in mutual funds.

Actually, one of the most important strategies applied by socially responsible mutual funds is ethical screening. The findings suggest that some of the ethical funds generated significantly higher return than other funds and benchmark index.

Finally, in section 7 we present the results of an empirical analysis on UK data. Also another approach, proposed in [10], treats the problem of negative data in DEA models by modifying the efficiency measure used, but neither this approach is directly connected to radial efficiency.

If we include in the analysis also DMU U 4, which has a negative value of output 1, puzzling results can be obtained, so that the DEA fractional problem 8 - 10 does not give a reasonable efficiency measure any longer.

On the other hand, for a 3 U 4 lies on the efficient frontiers and hence it is efficient. This quantity cannot become negative since in the worst case we may at most lose all the capital invested in a mutual fund An ethical measure for mutual funds In order to evaluate the performance of ethical mutual funds we need to build an ethical measure which can be used as an output variable to be taken into account together with the return indicator.

Performance evaluation of ethical mutual funds in slump periods

Actually, if the first output represents the average rate of return of the mutual fund and the second output is an indicator of its ethical level, this entails that when the average rate of return is negative, its value is indifferent for investors, wether it is only slightly less than zero or imply a heavy loss: Nevertheless, the DEA approach can only be applied under the assumption that all the input and output values are non negative.

Initial Exit Final Ethic. Future European Growth Morley Sust. To this purpose, it would be sufficient to use a suitable DEA model which is translation invariant.

The efficiency frontier of such an instance can be represented as in figure 2, where the cartesian axes represent the normalized output values y1j and y2j. Il Risparmio, L Basso, A.

Prices & Performance

Please read our Terms of Use above. Operations Research 34 Basso, A. In a DEA model, it is known that the solution provides a virtual unit which represents an efficient benchmark for an inefficient unit see e. On the other hand, we could exploit the financial meaning of the variable involved in order to choose a different return indicator as output variable which is financially significant and, at the same time, guarantees non negativity in all circumstances.

Composite measures for the evaluation of investment performance. On the whole, the set is made up of 59 DMUs.

Tata Ethical Fund(G)

However, few empirical studies investigate the performance of ethical funds by taking into account not only their returns and risks but also the investment costs and the ethical profile.

In particular, when the period to which the historical data refer falls within a slump period of the business cycle, the average rate of return of most stocks, and thus that of most mutual funds, is negative. The paper is organized as follows. This is indeed a crucial assumption in the measurement of performance with the DEA technique, and the reason can be seen from the analysis of the following stylized example.

Despite having higher risk, ethical funds outperformed other funds and benchmark index on the basis of various risk-adjusted measures and net selectivity returns. The rate of returns and the volatilities of the funds have been computed on an annual base; the input and output data are reported in table 2 as per cent values, with an initial invested capital set equal to for all investments.

Such information is organized in various sections; in particular, the funds are analyzed on the basis of the most important questions taken into consideration in order to define negative and positive ethical screening.

International Evidence on Ethical Mutual Fund Performance and Investment Style

Future Absolute Growth Morley Sust. However, while the expected rate of return of a mutual fund, as that of all risky portfolios, must be positive, this is not necessarily true for all assets in all periods when the computations are based on historical data.Check Tata Ethical Fund(G) performance and growth chart, quaterly and annual fund returns and complete track record of Tata Ethical Fund(G) at billsimas.com Ethical mutual funds are financial tools that enable investors to combine investment decisions with solidarity objectives and social concerns such as social justice, economic development, peace, defence of the environment and so on.

Home» Journal» International Journal of Business Ethics in Developing Economies» Volume 4 Issue 2» Do Ethical Funds Underperform Conventional Funds? - Empirical Evidence from India.

Taurus Ethical Fund - Bonus - Direct Plan

Do Ethical Funds Underperform Conventional Funds? - Empirical Evidence from India this paper seeks to evaluate and compare the performance of ethical. Socially responsible mutual funds tend to have higher fees than regular funds.

These higher fees can be attributed to the additional ethical research that mutual fund managers must undertake. Keywords: Socially responsible investment; Mutual fund fees; Mutual fund performance.

formance is an essential question for those investors who are concerned about the ethical consequences of their investments and, at the same time, want to obtain an adequate fl.

Get mutual fund overview for Tata Ethical Regular Growth, Returns, Performance, Fund manager, Asset Allocation, Risk Return Analysis, Style map.

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Ethical mutual funds performance
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