Center for Advancing Accounting

Are ESG Funds More Transparent? A Look at Opportunistic Disclosures of Mutual Fund Managers

• In Event: Disclosure

Abstract

I explore whether managers of Environmental, Social, and Governance (ESG) funds differ in their disclosure behavior vis-a-vis conventional fund managers. Consistent with ESG fund investors having longer investment horizons, I find that ESG portfolio managers engage in less opportunistic disclosure activities than their conventional fund managers counterparts. Interestingly, managers of ESG and conventional funds have similar stock-picking skills and portfolio turnovers, despite the conventional wisdom that ESG investors are more long-term oriented. Overall, my results suggest that the preferences of ESG investors affect ESG managers’ willingness to engage in opportunistic trading without significantly affecting their real portfolio decisions.

Author

• Manuela Dantas, California State University Northridge