Smeets, Paul. "Social Values and Mutual Fund Clienteles." Presentation to the Value of Values conference, Santa Clara University, May 14, 2010.

(Rough notes by Lloyd Kurtz, I apologize for inaccuracies or errors of emphasis. - lk)

Smeets presented data he has developed with Rob Bauer on green banking in the Netherlands. His intial runthrough challenged the traditional view of homo economicus (‘economic man’), noting that “in practice investors have... 1) behavioral biases 2) gree and fear 3) social values... Socially Responsible Investing (SRI) exists because investors do not behave like a homo economicus.” But, “in spite of large growth in SRI...we know little about the SRI clientele.” Using holdings, survey and other data from green banks in the Netherlands, their work shows:
  • “Investors with a strong social mindset pay less attention to fees and past performance and they are more loyal to their funds than investors with a pronounced financial mindset.
  • "We identify different segments of investors within the SRI clientele,” including “return chasers,” “values-driven,” “cost-sensitive,” and “mixed.” All of the segments placed some value on past performance and costs, but the relative importance of responsibility varied between 21% (for the cost sensitive segment) to 76% (for the values-driven segment.
  • The values-driven segment had the highest proportion of females, but also the lowest wealth, income, and investment knowledge. They were also the most loyal.


For practitioner’s one big implication of this work is that you have different types of social investors using the same investment product. Some are heavily socially motivated and almost ignore fees and performance, while others put more emphasis on the financial factors. Echoing Derwall, the simple distinction between ‘social investor’ and everyone else is just too simple.