We explore how mutual fund managers and investors react when the tradeoff between a fund's sustainability and performance becomes salient. Following the introduction of Morningstar's sustainability ratings (the “globe” ratings), mutual funds increased their holdings of sustainable stocks to attract flows. Such sustainability-driven trades, however, underperformed, impairing the funds’ overall performance. Consequently, a tradeoff between sustainability and performance emerged. In the new equilibrium, the globe ratings do not affect investor flows and funds no longer trade to improve their globe ratings.

中文翻译：

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可持续性还是性能？评级和基金经理的激励

我们探讨了当基金的可持续性和业绩之间的权衡变得突出时，共同基金经理和投资者会如何反应。在推出晨星可持续发展评级（“全球”评级）后，共同基金增加了可持续股票的持有量以吸引资金流入。然而，这种可持续发展驱动的交易表现不佳，损害了基金的整体业绩。因此，出现了可持续性和性能之间的权衡。在新的均衡中，全球评级不会影响投资者流动，资金不再通过交易来提高全球评级。