Economic policy uncertainty and active management: Evidence from SRI funds
Funding Sponsor
American University of Beirut
Author's Department
Economics Department
Fourth Author's Department
Economics Department
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https://doi.org/10.1016/j.frl.2025.107339
Document Type
Research Article
Publication Title
Finance Research Letters
Publication Date
6-1-2025
doi
10.1016/j.frl.2025.107339
Abstract
This study explores the impact of economic policy uncertainty (EPU) on the relationship between active management and the performance of socially responsible mutual funds. Using data on U.S. socially responsible funds, we show that active management is more valuable in periods characterized by high EPU. The findings are robust across different fund characteristics, active management metrics, EPU proxies, and fund performance measures. Our results are further validated using multiple estimation techniques. Additionally, funds that are younger, smaller, with higher expenses, lower turnover, and slower growth are more likely to benefit from active management as economic policy uncertainty increases.
Recommended Citation
APA Citation
Ahmed, N.
Tanos, B.
Farooq, O.
&
Bouaddi, M.
(2025). Economic policy uncertainty and active management: Evidence from SRI funds. Finance Research Letters, 79,
https://doi.org/10.1016/j.frl.2025.107339
MLA Citation
Ahmed, Neveen, et al.
"Economic policy uncertainty and active management: Evidence from SRI funds." Finance Research Letters, vol. 79, 2025
https://doi.org/10.1016/j.frl.2025.107339