Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/325502 
Year of Publication: 
2025
Series/Report no.: 
SAFE Working Paper No. 457
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
This paper analyzes the impact of disclosures of sustainable investment targets under the EU Sustainable Finance Disclosure Regulation (SFDR) on mutual fund flows. Using a staggered difference-in-differences setup and focusing on retail-oriented index funds, we find that sustainable investment targets have a temporarily positive impact on fund flows in comparison to funds without sustainable investment targets. Furthermore, we find a negative linear relationship between sustainable investment targets and fund flows. While lower targets attract higher fund inflows, higher targets result in significantly lower or even no inflows. Our results suggest that up to a target level of 20% in sustainable investments, index funds can attract more inflows. This suggests a trade-off between sustainability commitments and performance considerations.
Subjects: 
Sustainability
ESG
SFDR
Mutual Funds
Index Funds
Fund Flows
Disclosure
JEL: 
G11
G23
G28
G14
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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