Socially Responsible Mutual Funds

Abstract This chapter provides a broad overview of the development and structure of socially responsible mutual funds (SRMFs) and socially responsible investing (SRI). The chapter provides general definitions of SRMFs and SRIs, explains the investment paradigm of SRMFs and how mutual funds use environmental, social, and governance (ESG) criteria to screen assets in their portfolios. It covers ESG frameworks integration and performance measurement of SRMFs, reviews the academic literatures on SRMFs' performance and growth in North America, Europe, Australia, and Asia, and discusses future trends and development opportunities of SRMFs. The chapter also covers notable issues and challenges of SRMFs from the perspective of both investors and managers. It concludes with a discussion on the distinct challenges and future opportunities of researching and managing SRMFs in an increasingly socially conscious investing environment.