Abstract
Given the rising trend of sustainable investing over the recent years, we examine how ESG ratings affect the performance, performance persistence and flow of new money European equity mutual funds have experienced for the period from January 1, 2010 to December 31, 2022. Results show that low-rated ESG funds display better performance, stronger positive performance persistence and weaker flow-performance relationship. During the COVID-19 pandemic, investors became risk-averse, withdrawing from low-rated ESG funds despite their prior superior performance. Contrariwise, investors’ preference for funds that incorporate sustainable assets to a great extent denotes that sustainability is perceived by investors as a necessity.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
