The effect of the business cycle on the performance of socially responsible equity mutual funds

The current study applies a two-state switching regression model to examine the behavior of a hypothetical portfolio of ten socially responsible (SRI) equity mutual funds during the expansion and contraction phases of US business cycles between April 1991 and June 2009, based on the Carhart four-factor model, using monthly data. The model identified a business cycle effect on the performance of SRI equity mutual funds. Fund returns were less volatile during expansion/peaks than during contraction/troughs, as indicated by the standard deviation of returns. During contraction/troughs, fund excess returns were explained by the differential in returns between small and large companies, the difference between the returns on stocks trading at high and low Book-to-Market Value, the market excess return over the risk-free rate, and fund objective. During contraction/troughs, smaller companies offered higher returns than larger companies (ci = 0.26, p = 0.01), undervalued stocks out-performed high growth stocks (h i = 0.39, p <0.0001), and funds with growth objectives out-performed funds with other objectives (oi = 0.01, p = 0.02). The hypothetical SRI portfolio was less risky than the market (bi = 0.74, p <0.0001). During expansion/peaks, fund excess returns were explained by the market excess return over the risk-free rate, and fund objective. Funds with other objectives, such as balanced funds and income funds out-performed funds with growth objectives (oi = −0.01, p = 0.03). The hypothetical SRI portfolio exhibited similar risk as the market (bi = 0.93, p <0.0001). The SRI investor adds a third criterion to the risk and return trade-off of traditional portfolio theory. This constraint is social performance. The research suggests that managers of SRI equity mutual funds may diminish value by using social and ethical criteria to select stocks, but add value by superior stock selection. The result is that the performance of SRI mutual funds is very similar to that of the market. There was no difference in the value added among secular SRI, religious SRI, and vice screens.

Concessions in National Parks: Responsible Tourism

Concession operations in natural areas have always been a source of controversy. The objectives of profit and preservation are seen by many to be incompatible. The author will examine the relationship of national park concessions and the environments in which they operate, focusing on concession selection and operation, using responsible tourism concepts as a guide

Tourism in the Egyptian Red Sea Area: A Responsible Development Approach

Egypt has always been a world-renowned tourism destination of antiquity. A government policy of product diversification attempts to disperse tourists more evenly in the country. The Egyptian Red Sea coast is therefore targeted as a new tourism development zone. The author identifies the new development patterns in the Egyptian Red Sea area and discusses the potential tourism impact on the coastal environment. It is recommended that a responsible development approach be adopted for coastal and marine tourism in the Egyptian Red Sea area

Casino Gambling is Hot: Gambling Debt Collection is Hot

Gambling on credit, considered a vice by some, is not judicially collectible based upon the Statute of Anne. This common law statute prevents the collection of gambling losses, unless expected by state statute. This article reviews and updates the findings of an unenforceability of gambling debt study conducted in 1989 just prior to the rapid expansion of gambling in the United States.

Advertising Legalized Gambling: A Late Bloomer Under the First Amendment

New federal laws and court cases have put a new perspective on the ability of the industry to advertise as it has never been able to do before. With gaming becoming more prevalent, the acceptability of the legal industry is making promotion easier. The author discusses these new influences.