Bauer and Smeets (2010)

Bauer, Rob, and Paul Smeets.  “Social Values and Mutual Fund Clienteles.”  Working paper (Maastricht University), June, 2010.

From authors' abstract:  "We conduct a comprehensive segmentation analysis [of mutual fund clienteles] based on the proportion of SRI mutual funds in the portfolio of investors and the utility function of investors...  Segmenting individuals on their utility function yields different groups of socially responsible investors. The segments differ significantly in their loyalty towards SRI mutual funds and the attention they pay to past performance and fees. First, we identify a very loyal segment that obtains many non-pecuniary benefits by investing in SRI mutual funds and which largely ignores past performance and fees. Remarkably, instead of focusing on non-pecuniary benefits from SRI, the largest subset of the SRI clientele predominantly chases past returns. Another segment focuses primarily on fees, again suggesting a financial mindset among many of the socially responsible investors. Our finding on the heterogeneity among responsible investors offers new insights into the way mutual fund families can enhance product differentiation, advertising, and the selection of distribution channels."