PhD seminar with Ilaria Marotta

Title: Investors and fund managers responses to new sustainability rating information. Evidence from European mutual funds

Abstract: This project looks at the impact of the publication of Morningstar Sustainability Rating (MRS) on investors and fund managers. In the first part, I measure investors’ response to the launch of MRS in March 2016, then I use the same setting to evaluate investors' reaction to the change of the methodology of MRS that happened in 2018. There is evidence that investors react to sustainability labels after the launch of MRS in March 2016, but they do not react to the change of the methodology. Dividing the sample into institutional and retail investors, we observe that they behave differently. The second part of the project focuses on whether fund managers, managing funds very close to the cut-off to get an extra globe, increase their portfolio sustainability score. Exploiting characteristics like the gender of the fund manager, the number of managers appointed to the fund and the rating of the manager, I find heterogeneous effects on the change of the portfolio sustainability score.