Studies have considered fund family effects on fund performance. This study examines fund family effects by building on the work of Kathman [1] comparing the performance of five funds with a broad SRI (or ESG) mandate that belong to a family of funds that specialize in this area to five funds that have focused mandates but do not belong to such families and are stand-alone products. The objective is to see if being part of a larger family or not affects the performance of the funds. The of the two groups of funds are analyzed using the CAPM, Fama-French, and four-factor models, as well as the tests required on the entire sample. Building on the work of Gil-Bazo et al. [3] and on that of Phillips et al. [3], this study further investigates whether there are differences between SRI funds based on the “family” to which they belong. The most interesting contribution of this study is the comparison between the two groups of funds. One might expect the funds from specialty firms to have some advantage due to economies of scale or returns on accumulated expertise. However, the Chow test indicates that there are significant differences between the two groups and analysis shows that the five funds from the non-specialty firms is the better performer.

social conscience investing, mutual funds