American Journal of Economics and Business Administration

The Ethical and Non Ethical Mutual Funds Comparison

Rosa Adamo, Angela Coscarelli, Domenica Federico and Antonella Notte

DOI : 10.3844/ajebasp.2010.360.365

American Journal of Economics and Business Administration

Volume 2, Issue 4

Pages 360-365

Abstract

Problem statement: One of the astonishing new developments in the financial community is the rise of ethical investments during the last decade. Particularly, the recent financial crisis has determined a major attention towards an ethically oriented finance based on social investments and environmental benefits that can create greater corporate crisis prevention. Because of the sheer size and importance of the ethical mutual funds, we thought to compare the ethical and non ethical mutual funds. Approach: The aim of this study was to describe the ethical and non ethical mutual funds under Italian and foreign law highlighting how some factors, such as performance, typology (equity, balanced, fixed income), geographic location, management fees, characterize these funds in different way. Results: The analysis has been carried out collecting a data set of 219 mutual funds published on www.morningstar.com. The data set is subdivided in 109 ethical mutual funds and 110 non ethical mutual funds. The study uses a multi-disciplinary approach and it is led by a Multiple Correspondence Analysis (MCA) which puts in evidence the principal characteristics of the mutual funds by their projection on a factorial plane. Later the multivariate analysis carries out typologies of mutual funds clusters with particular characteristics by a Cluster Analysis. The study confirmed the existence of different characteristics with reference to the ethical and non ethical mutual funds. Particularly, it puts in evidence three groups of funds which are inside homogeneous but heterogeneous between them by the characteristics considered. The first groups, defined

Copyright

© 2010 Rosa Adamo, Angela Coscarelli, Domenica Federico and Antonella Notte. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.