It is mentioned that Socially Responsible Investing (SRI) methodology has a bias towards small cap securities. Why is this the case? - bn
I believe it may have to do with Liqour, Cigarette, etc. companies are mostly Largecaps and so it’s easier to find Socially responsible companies in Small Caps??
Agree with CareerChange. Other than sources of revenue, many other criteria used in negative screens mostly target large cap companies, like environmental issues. SRI might create biases not only in terms of cap size but in terms of industry concentration as well.
So there are two business plans a) Sell organic Belgian endive b) Sell whiskey, nuclear weapons, cigarettes So which one of those becomes large-cap and which becomes small cap and which goes in the socially responsible investing fund?