Outperformance of Socially Responsible Investing: An Evidence in Korea

The objective of this paper is to test if SRI stock funds outperform non‐SRI stock funds in Korea. We have found a strong evidence for outperformance of SRI funds against non‐SRI stock funds by two‐fold. First, we have had evidence that investment performance of SRI funds measured by Sharp Index is slightly higher than that for non‐SRI funds. Second, SRI funds seems to affect the investment performance positively even after controlling other variables such as age of funds, fund size, risk, and number of selling agencies. The research results imply that we need to consider whether stock funds belong to SRI or not. In addition, it implies that we can save our planet just by our considerate choice of investments.