This study investigates the performance and investment styles of mutual ethical equity funds on the global market. To examine this, the Fama French Five Factor model is applied by adding the new variables to Fama French Three Factor Model step by step, discovering new results about performance and investment style. This study finds support for mutual ethical equity funds on developed markets to be outperformed by the equity market between 2006 and 2016. Between 2011 and 2016, however, these funds performed similar to the market when accounting for investment style. Regarding investment style, mutual ethical equity funds on developed markets appears to be exposed to aggressive companies, i.e. companies that makes substantial investments. Mutual ethical equity funds that invests on emerging markets, however, are outperformed by both the global equity market and the funds on developed markets between 2011 and 2016. This study’s results indicate that these funds perform similar to profitable, small companies with high book-to-market values. It does not appear to have occurred any win-win situations, but between 2011 and 2016 an investor would not had lost money when held an ethical fund instead of a global index fund.
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