The Impact of Financial and Sustainability Metrics on the Size of European Investment Funds: An Enhanced Panel Data Analysis

This paper investigates the impact of key financial and sustainability metrics on the size of European investment funds. Using an enhanced mixed-effects model, it explores the relationship between fund size and a set of explanatory variables, including financial performance, sustainability score, low controversy exposure, geographic diversification, technology allocation, beta, expense ratio, and other structural characteristics. The dataset comprises 1,800 observations from January 2015 to March 2024. The results reveal that both financial and sustainability factors significantly influence fund size, with notable temporal variation. These findings provide relevant insights for fund managers and institutional investors, contributing to strategic decision-making in the context of sustainable finance.