Nobody downloaded yet

Examination the differences between the ethical and conventional investment mutual funds - Research Paper Example

Comments (0) Cite this document
Running Head: Mutual Investment Funds Mutual Investment Funds Name: Institution: Date Introduction In the course of the last ten years, there has been a steady rise in the number of ethical investment mutual funds also known as social investment mutual funds…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94% of users find it useful
Examination the differences between the ethical and conventional investment mutual funds
Read TextPreview

Extract of sample "Examination the differences between the ethical and conventional investment mutual funds"

Download file to see previous pages This led to investors’ social awareness; thus, the concept was to make sure that any form of investment followed ethical criteria. This led to the creation of ethically managed investment funds that have been steadily increasing and represent a large amount of money invested in a country like the United States. About 12% of funds that are being professionally managed are part of a socially responsible mutual fund or of other private portfolios. The fact that there is a very large amount of money invested in this manner has led researchers to attempt to answer the question whether these ethical investment mutual funds are more expensive to run and perform better than the other conventional investment mutual funds. Initial research shows that the ethical investment mutual funds do not invest as widely as the conventional ones. However, there is no major difference between the amounts of money earned by the ethical investment mutual funds when compared to the conventional ones (Diltz, 1995). Statistics also showed that there is no difference in the areas that the two types of investment mutual funds tend to invest in (Sauer, 1997). Most of the evidence necessary to make the important comparisons between the two types of investment mutual funds is mostly found in the United States and the United Kingdom. Additionally, there is no pattern of investment that can conclusively determine the differences between the two types of investment mutual funds. However, when the ethical investment mutual funds are compared according to investment in small companies with the other non-ethical ones, a bias is found (Luther & Matatko, 1994). It showed that the ethical funds were the better performing and earned more than the conventional ones in these small companies. A different study that was conducted by Mallin et al. (1995) attempted to erase the problem of the benchmark that was set on the small companies and the investment by the ethical investment mutual funds. In this study, they considered the size of the ethical fund and the date that it was created. A method of statistics referred to as the Jensen’s alpha was used to analyze their findings. They concluded that ethical funds outperform the other funds using this criterion. The small cap bias that was cited by Luther and Matatko (1994) and that Mallin et al. (1995) attempted to correct led to further research by Luther and Matatko which concluded that using the size of the fund and applying the 2-factor Jensen’s alpha method; there was no conclusive evidence that reflected a difference in the financial performance of both investment mutual funds and that the small cap bias still existed. The study of the differences between the two types of investment mutual funds was complicated at this point. It was further complicated when Dibartolomeo (1996) and Kurtz (1997) claimed that the better performance of the ethical investment mutual funds was due to “large-cap growth exposures” and not due to the social factors essentially considered. This presented further biases attributed to sector and style. The purpose of this paper is to examine subsequent research in order to uncover the differences between the ethical investment mutual funds and the conventional investment mutual funds in order to determine whether the former performs better than the latter. This paper will not aim to discredit any research conducted, nor will it seek to be investigative but it will simply ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Examination the differences between the ethical and conventional Research Paper”, n.d.)
Retrieved from
(Examination the Differences Between the Ethical and Conventional Research Paper)
“Examination the Differences Between the Ethical and Conventional Research Paper”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Examination the differences between the ethical and conventional investment mutual funds

Do Socially-Responsible Mutual Funds Perform Better Than Conventional Mutual Funds

...? Do Socially-Responsible Mutual Funds Perform Better Than Conventional Mutual Funds? Introduction Mutual funds are d to be an investment fund of different kind. Investment fund refers to the assortment of investments for instance bonds, stocks or other kind of funds. Mutual funds are significantly different from most of the different kinds of available funds. Mutual funds are described...
11 Pages(2750 words)Research Paper


... Introduction A “mutual fund” is a scheme for investment which is professionally run by pooling money from many investors to buy securities. The mutual funds firm management undertakes market analysis that enables the fund to make a decision on asset allocation to invest depending on the expected return and risk of the assets. The decision that the managers of the firms take has in the past raised questions on how their analysis are able to beat the market consistently. To out perform the market returns, the manager is expected to demonstrate the ability to make correct market timing and market selection. Market selection is when the manager is able to select among the assets traded in the market the lowly priced asset and sell... the...
10 Pages(2500 words)Dissertation

Mutual Funds

...against market fluctuations, as when one security drops in value, another will increase. A manager or board of directors oversees these funds. The board hires a fund manager and works to ensure that the mutual fund is managed in the intended interest of the shareholders. This essay examines the advantages, disadvantages, and different types of mutual funds. Advantages There are a great variety of advantages to investing in mutual funds. One of the most prominent such aspects is the increased amount of diversification. In terms of portfolio theory,...
5 Pages(1250 words)Essay

Do Socially-Responsible Mutual Funds Perform better than Conventional Mutual Funds

...nations like Britain, France, US and Russia. It is said that more than 10% of funds that are being managed are part of socially responsible funds (Schepers, 2009; Renneboog et al 2008). There is increasing amount of capital being invested ethically which has made researchers to determine whether socially responsible mutual funds is the best approach for investors than the conventional mutual funds. It has been held initially that, socially responsible mutual funds did not invest widely and deeper into markets as...
8 Pages(2000 words)Research Paper

Differences between Islamic and Conventional Banking

..., Hussain & Rehman 2012). This has pushed them to set their banking systems, which follow their guidance and principles. It is; therefore, fair to say that Islamic banking systems are interest free. The approval and organization of funds is also under the laws and principles of Islam. Another major difference between the two forms of banking is the overheads present. In Islamic banking, it is observed that the overheads are lesser. The products, goods, and services offered by IBs are lesser than those offered by the conventional banks. In other instances, Islamic banks have to offer consumers better and much valuable products and services. This is so as to keep up with...
3 Pages(750 words)Essay

Money Market Mutual Funds the standard $1 per share with the losses covered . The key difference between these two types of market accounts is the insurance of the accounts. The Federal Deposit Insurance Corporation is a government agency that insures banks and bank accounts. Money market deposits in banks that are FDIC insured are free of risks of loss of the investment as the agency offers compensation on deposits of up to $250,000 for each depositor in one bank (Garman and Forgue 154). The money market mutual funds on the other hand are not FDIC insured and the risk of investment loss is high as the investors rely on breaking the buck for compensation....
5 Pages(1250 words)Essay

Mutual Funds

...of a collective investment which takes money from many investors and invests the money in different forms and thus it uses the concept of diversification wherein it speaks of the idea of spreading the money across many different types of investments. This whole concept reduces the risk tremendously and this concept is absent when we consider non depository institutions. Thus in this was we have outlined the idea of non depository institutions and the difference between mutual funds and non depository insitutions. Thus in this we have discussed all the basic details which cover the idea...
8 Pages(2000 words)Essay

Mutual Funds Articles

...When a Fund Loses Its Star By Aaron Pressman The article “When a Fund Loses Its Star” written by Aaron Pressman highlights the fact that one of the major problems that the finance industry is facing today is that most of the fund managers are nearing their retirement age and it is expected to double in the next ten years or so. With due respect to the skills of the incoming managers, still the funds which are already in transition suffers from some common problems-Hedge funds and other traders try to guess what positions might be sold. Sometimes investors in a fund jump ship en masse, forcing ill-timed asset sales. In many cases, it is...
6 Pages(1500 words)Essay

Investing In mutual funds

...Mutual Fund Investment The current global economic recession has created lot of concerns among investors about the safety of their investments. Some of the trusted traditional financial institutions like banks have collapsed and hence the investor’s belief in banks has been reduced considerably. On the other hand the share market and mutual funds were also adversely affected by the current recession. Many people have lost huge amounts of money because of the problems mutual fund and share market investments. This paper focuses on investments in general and...
2 Pages(500 words)Essay

Differences Between Islamic Bank and Conventional

...Differences between Islamic Bank and Conventional Islamic baking is different from conventional banking in a number of ways. The key difference between the two forms of banking emanates from the fact that Shariah foundation forms the basis of Islamic banking. Unlike in conventional banking, all dealings, business approaches, focus of investments, and transactions take place on the basis of Shariah law. Islamic banking is based on the foundation of Islamic faith; thus, it operates within the limits of Islamic faith. Islamic banking sets forth a number of principles. These principles...
2 Pages(500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic Examination the differences between the ethical and conventional investment mutual funds for FREE!

Contact Us