Can robo advisors expedite carbon transitions? Evidence from automated funds

Shan, S ORCID: https://orcid.org/0000-0003-4928-588X, Umar, M and Mirza, N, 2022. Can robo advisors expedite carbon transitions? Evidence from automated funds. Technological Forecasting and Social Change, 180: 121694. ISSN 0040-1625

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Abstract

When it comes to making comparisons with traditional funds, it has been observed that Robo advisers have emerged as a viable alternative that imposes a substantially lesser load on the investors. As a result, they are capable of playing a crucial role in supporting low-carbon transitions - a phenomenon that has never been investigated prior to this. In this study, we assess the performance of automated funds, after categorizing them into different groups, based on their investment exposure to carbon-emitting enterprises. Our findings reveal that automated funds that invest in low-carbon funds tend to outperform their competitors. Moreover, when we compare the absolute returns, the return to value at risk, the adjusted Sharpe ratio, and Jensen's alpha, these results remain consistent. In addition to this, we also found that Robo funds with less exposure to polluting companies have better market timing. Therefore, we conclude that these technology-enabled investment vehicles can help with low-carbon transitions and are instrumental in achieving sustainable development goals.

Item Type:	Journal article
Publication Title:	Technological Forecasting and Social Change
Creators:	Shan, S., Umar, M. and Mirza, N.
Publisher:	Elsevier BV
Date:	July 2022
Volume:	180
ISSN:	0040-1625
Identifiers:	Number Type 10.1016/j.techfore.2022.121694 DOI 1867045 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Laura Ward
Date Added:	27 Feb 2024 09:43
Last Modified:	27 Feb 2024 09:43
URI:	https://irep.ntu.ac.uk/id/eprint/50949

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