Not logged in.
Quick Search - Contribution
Contribution Details
Type | Journal Article |
Scope | Discipline-based scholarship |
Title | Low carbon mutual funds |
Organization Unit | |
Authors |
|
Item Subtype | Original Work |
Refereed | Yes |
Status | Published in final form |
Language |
|
Journal Title | Review of Finance |
Publisher | Oxford University Press |
Geographical Reach | international |
ISSN | 1572-3097 |
Volume | 28 |
Number | 1 |
Page Range | 45 - 74 |
Date | 2024 |
Abstract Text | Climate change poses new challenges for portfolio management. In our not-yet-low carbon world, investors face a trade-off between minimizing their exposure to climate risks and maximizing the benefits of portfolio diversification. This paper investigates how investors and financial intermediaries navigate this trade-off. After the release of Morningstar's novel carbon risk metrics in April 2018, mutual funds labeled as "low carbon" experienced a significant increase in investor demand, especially those with high risk-adjusted returns. Fund managers actively reduced their exposure to firms with high carbon risk scores, especially stocks with returns that correlated more with the funds' portfolios and were thus less useful for diversification. These findings shed light on whether and how climate-related information can re-orient capital flows in a low carbon direction. |
Free access at | DOI |
Related URLs | |
Digital Object Identifier | 10.1093/rof/rfad015 |
Other Identification Number | merlin-id:23538 |
PDF File | Download from ZORA |
Export |
BibTeX
EP3 XML (ZORA) |