DOING WELL by doing good is a myth promoted by asset managers anxious to sell socially responsible investment (SRI) funds, according to French research.

"SRI is not delivering outperformance. That is the strong conclusion of the research," said Noël Amenc, professor of finance and director of the Edhec risk and asset management research centre. "It would be mis-selling to promote SRI based on outperformance, because it is not there in the figures."

In France, SRI has become fashionable in recent years, with assets under management growing from €6.9 billion to €22.1 billion in the four years to 2007. Although the sector is small in relation to the absolute size of the French market, accounting for less than 1 per cent, Edhec predicts this share will increase.

"This asset class is of great interest to institutional investors in a country where capitalism is not always held in esteem," said Mr Amenc in Socially Responsible Investment Performance in France, 2008, a study co-authored with Véronique Le Sourd.

Using factor-based methodology, which excludes performance due to style biases and market cycles, the Edhec research found no evidence that SRI investment added value. Indeed, it found almost no significant difference between the performance of SRI funds and mainstream equity funds, which proponents of SRI will at least hail as laying to rest the perception that investing responsibly necessarily involves sacrificing returns.

"The good news is 'there's not a difference'. Bad news is 'what's the difference?'," said Matt Christensen, executive director of Eurosif, the Paris-based European social investment forum.

Mr Amenc, however, was concerned about how products are sold. The Edhec research highlighted the frequency with which sales literature associates SRI with performance. "Salesmen want to conclude the sale quickly. Performance is a good way to conclude sales without having to do in-depth analysis," said Mr Amenc. "This is the main problem: people are trying to sell SRI in a normal way".

He emphasised this is not a criticism of SRI: "There could be a positive effect from SRI selection but it is not in the figures. If you sell things with a bad argument, in the long term, that's the way to kill the asset class."

It is impossible to draw any meaningful conclusions about SRI performance in the future, he warned, because the market was too young and changing too fast.

The research is an extension of previous work and the latest shot in a battle between Edhec and investment consultancy Altedia, which this year published a study showing significant outperformance by SRI funds. The original Edhec research excluded many more recently established funds,according to Altedia.

Edhec counters with an exhaustive analysis of funds, including the single year on which Altedia based its conclusions. They point out SRI alpha (excess returns due to SRI selection) varied widely from one year to another.