Discussion Paper Details

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Title: Mutual Fund Performance and Flows During the COVID-19 Crisis

Author(s): Lubos Pástor and Blair Vorsatz

Publication Date: July 2020

Keyword(s): COVID-19, Mutual funds and sustainability

Programme Area(s): Financial Economics

Abstract: We present a comprehensive analysis of the performance and flows of U.S. actively-managed equity mutual funds during the COVID-19 crisis of 2020. We find that most active funds underperform passive benchmarks during the crisis, contradicting a popular hypothesis. Funds with high sustainability ratings perform well, as do funds with high star ratings. Fund outflows largely extend pre-crisis trends. Investors favor funds that apply exclusion criteria and funds with high sustainability ratings, especially environmental ones. Our finding that investors remain focused on sustainability during this major crisis suggests they view sustainability as a necessity rather than a luxury good.

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Bibliographic Reference

Pástor, L and Vorsatz, B. 2020. 'Mutual Fund Performance and Flows During the COVID-19 Crisis'. London, Centre for Economic Policy Research.