ESSAYS ON MUTUAL FUNDS

Abstract

This paper analyzes whether sustainable investors are sensitive to fees and whether investors in funds with a higher sustainability rating are more sensitive to fees than investors in nonsustainable funds. Using an international sample of equity mutual funds, I find that they in general are more sensitive to fees and that this sensitivity increases with Morningstar's globe ratings. Moreover, investors in funds without an explicit sustainability objective are more sensitive to fees than investors in funds with such an objective. The results indicate that sustainable investors elicit a stronger response to fees than other investors, but that those investing in sustainable funds without a sustainability mandate respond the most.