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Do Social Factors Affect Investment Behavior and Performance? Evidence from Mutual Fund Holdings

31-07-15 |

We study the economic significance of social dimensions in investment decisions by analyzing the holdings of U.S. equity mutual funds over the period 2004-2012. Using these holdings, we measure funds’ exposures to socially sensitive stocks in order to answer two questions. What explains each mutual fund’s exposure to controversial companies? Does exposure to controversial stocks and to stocks with other ESG strenghts and concerns drive fund returns? 

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Maastricht University