School of Business
Document Type
Article
Abstract
Sustainable investing has grown rapidly, but it remains unclear whether actively managed sustainable funds outperform passive ones. This study compares the performance of high-sustainable active U.S. equity mutual funds and their index peers from September 2018 to April 2022, dividing the period into pre-crash, crash, and post-crash phases around the COVID-19 market downturn. On average, both active and index funds underperform, with the sharpest losses occurring during the crash. High-sustainable funds outperform low-sustainable ones, particularly during the crash. However, high-sustainable active funds do not outperform their passive counterparts in any period. These results suggest that active management does not offer greater downside protection and raise questions about the higher fees typically charged by actively managed sustainable funds. © 2025 by the authors.
Publication Title
Journal of Risk and Financial Management
Publication Date
2025
Volume
18
Issue
10
ISSN
1911-8074
DOI
10.3390/jrfm18100530
Keywords
active vs. passive funds, COVID-19 pandemic, fund performance, market crash, sustainable funds
Repository Citation
Fang, Fei and Parida, Sitikantha, "Do Active Sustainable Equity Funds Outperform Their Passive Peers? Evidence from the COVID-19 Pandemic" (2025). School of Business. 241.
https://commons.clarku.edu/faculty_school_of_management/241
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright Conditions
Fang, F., & Parida, S. (2025). Do Active Sustainable Equity Funds Outperform Their Passive Peers? Evidence from the COVID-19 Pandemic. Journal of Risk and Financial Management, 18(10), 530.
