Philippe Gillet attended to the seminar Chair for Ethics and Financial Norms in Paris on February 10. He presented the paper entitled : «Are Ethical Funds More Resistant to Crisis than Conventional funds?».
In this article, Philippe Gillet and Julie Salaber (Westminster University) assess the recent development and performance of ethical investments around the world. Ethical investments include both socially responsible investments (following Environmental, Social and Governance criteria) and faith-based investments (following religious principles). After presenting the development of each type of funds in a historical context, they analyse their ethical screening process, highlighting similarities and differences across funds and regions. This leads us to investigate their characteristics in terms of return and risk, and finally evaluate their historical performance using various risk-adjusted performance measures on a small sample of US funds. Hence they are able to not only compare the performance of each fund with each other and with traditional investments, but also assess their relative resilience to the 2007-08 financial crisis. They found ambiguous results. It seems that ethical investments makes a better performance than conventional funds, but the difference is weak and it is difficult to get a definitive conclusion.