Are Ethical Investments Good?

Time to hunt for undervalued companies in the DS400. ..

Favorite sentence from this paper ” Hong and Kacperczyk, however, may be introducing bias in their study due to imposing their own beliefs in conducting a Keynesian beauty contest2 to determine what sin might be.”

(H/T MoneyScience)

Click Here To Find Out If  Ethical Investments  Are Also Profitable

Abstract (Via SSRN)
Our study considers whether ethical investments are also good investments. We utilize long-run event study methodology to study abnormal returns associated with firms being included in, and dropped from, KLD Research and Analytics’ (KLD) Domini 400 SocialTM Index (DS400). There are positive and statistically significant long-run abnormal returns for firms being included in the DS400. The market also appears to anticipate decisions to include firms in the DS400; short-run abnormal returns associated with firms being included in the DS400 are consistent with the market correcting high abnormal returns before the date the firm is added to the index.

Excerpt From The Introduction (Via SSRN)

In a time of rapid social and environmental change, investors have increasingly been drawn to ethical investments. Perhaps it is mean spirited to ask if ethical investments are also good investments. Happily, we provide clear evidence
that investing in companies which are recognised as being ethical can have long-term benefits for investors’ wealth. Our finding that ethical investment is good flies in the face of the consensus now emerging from academic studies in finance.

Click Here To Find Out If  Ethical Investments  Are Also Profitable