The investor in ESG mutual funds

Abstract

This paper analyzes a wide range of clients from a Portuguese bank who have held participation units in mutual funds over the past two decades, in order to understand the extent to which the SRI investor differs from the traditional investor. The analysis shows relevant differences between these investors, in terms of both demographics and trading experience. In general, SRI fund investors reside in large urban centers (Lisbon and Porto), have higher levels of education, financial literacy and numerical skills, and hold qualified positions. SRI investors have more trading experience in securities, they have carried out a higher number of mutual fund trades, and they have invested in a wider range of mutual funds than investors in domestic funds. The differences between investors in SRI funds and investors in foreign funds are more modest, except for stock, bond, derivative and range of mutual funds traded. These differences seem to point to increased dynamism, diversity and trading activity for SRI investors compared to the other investor groups. Ultimately, this search for diversity may explain the investment in socially responsible mutual funds. * The opinions expressed in this article are those of the authors and do not necessarily reflect the official position of the CMVM. The original version of this paper (in Portuguese) has been accepted for publication in Cadernos do Mercado de Valores Mobiliários (forthcoming).