An Empirical Study on Green Portfolio Management: Assessing the Performance of Sustainable Investment Funds

Abstract

An evaluation of sustainable (green) mutual fund
performance versus traditional equity mutual funds takes place
in the Indian context during the period from 2020 to 2024. The
research design uses a descriptive approach to analyze 10
sustainable funds alongside 10 traditional funds through the
performance indicators of Sharpe Ratio, Jensen’s Alpha, Beta,
Standard Deviation together with Compound Annual Growth
Rate (CAGR). The risk-adjusted performance assessment
shows that sustainable funds produce better returns than
traditional funds as measured through higher Sharpe Ratios
and Jensen’s Alpha measures. The market sensitivity levels of
sustainable funds are lower because their Beta values
demonstrate reduced exposure to market fluctuations. Standard
deviations from ESG funds are slightly higher but the funds
demonstrate competitive returns through their top performers
including SBI Magnum ESG Fund and ICICI Prudential ESG
Fund with CAGRs above 11%. Sustainable investment funds
create a secure foundation for investors who get access to solid
future returns in emerging markets and thus present an
appealing investment alternative. The research provides crucial
implications which benefit investors at all levels aiming to
establish sustainable finance operations alongside climateconscious investments in India’s capital markets.