Ethical unit trust financial performance: small company effects and fund size effects

An examination of UK ethical unit trusts show that they have greater exposure to small firm risks than general unit trusts. Both indicate a tendency to underperform when exposed to small firms but ethical unit trusts are more negatively affected by small firm effects than non-ethical unit trusts. Despite the fact that ethical and general unit trusts are exposed to small firms effect, it cannot be concluded that fund size has a correlation with the performance of unit trusts.