A Performance Evaluation of Ethical Mutual Funds: Evidence from India
Jasvinder Kaur 
Rashmi Chaudhary
Abstract
Since the last decade, ethical investment has gained significant development in the Indian financial market. With the increasing focus on social responsibility and the importance of ethical funds, investors pay more attention to the activities of these funds and their impact on society. Whether ethical fund investment affects portfolios’ return performance is still questionable. To address this question, this paper investigated the performance of various ethical mutual fund schemes and compared them with benchmark index (NIFTY 500 Shariah Index) using data from 2014-15 to 2019-20. The performance of the sample schemes was measured based on the risk-return profile and Sharpe’s ratio, Treynor’s ratio and Jensen’s alpha measures. The results indicated that nine out of ten ethical schemes outperformed the benchmark index during the study period. This implies that ethical funds generated positive returns with lower risk. As a policy implication, investment funds and financial institutions should develop fund schemes and stocks that incorporate ethical considerations in an investment.
Keywords: Ethical Investing, Risk Adjusted measures, Investment Performance, Mutual Funds
Volume 12, Issue 2
December 31, 2021
Pages: 1-22
DOI: http://doi.org/10.4038/cbj.v12i2.78
Suggested citation:
Kaur, J. & Chaudhary, R. (2021). A performance evaluation of ethical mutual funds: Evidence from India. Colombo Business Journal, 12(2), 1-22. http://doi.org/10.4038/cbj.v12i2.78
Jasvinder Kaur
Department of Commerce, Kurukshetra University, India
Rashmi Chaudhary
Department of Commerce, Kurukshetra University, India
