Sin Stock Proportion and Investment Manager Education Background in Indonesian Equity Funds

Abstract

Investors have done sin stocks exclusion in the portfolio as negative screening of socially responsible investment. The impact of sin stock exclusion has brought different results for an investment portfolio; therefore, the investment manager fully decided on sin stocks investment. This research observes the relationship between sin stock proportion and fund managers’ education background. An investment manager’s educational background influences both financial performance and socially responsible behavior. Equity funds are chosen since they made up most of the Indonesian investment market. Proportion is used as a calculation of investment managers’ characteristics. The fixed effect model is applied in the panel data regression method. The study finds a significant negative relationship between sin stock proportion in asset allocation and investment managers’ education level. The research contributes to the literature on sin stocks in Indonesia concerning investment managers’ education background and among the first that observe all holdings in financial reports.

Citation

Faturohman, T., Widjaya, K.A. and Afgani, K.F. (2021), "Sin Stock Proportion and Investment Manager Education Background in Indonesian Equity Funds", Barnett, W.A. and Sergi, B.S. (Ed.) Environmental, Social, and Governance Perspectives on Economic Development in Asia (International Symposia in Economic Theory and Econometrics, Vol. 29A), Emerald Publishing Limited, Leeds, pp. 83-99. https://doi.org/10.1108/S1571-03862021000029A020