Voting in the Stock Market–Retail Investor Preferences During COVID-19

Abstract

Using data from Robinhood, this study investigates retail investors' movement towards/from securities with different environmental, social and governance scores during the COVID-19 pandemic. Although the number of retail investors holding securities with low environmental scores declined, the number holding high-score securities remained steady. We also find heterogeneity in investors' reactions to different subcategory scores. The equal-weighted buy-and-hold portfolio of high-score securities did not outperform that of low-score securities in either volatility or return, suggesting neither financial return nor risk drove retail investors' preference for high environmental score securities. Thus, such ‘voting’ by investment choice is independent of pecuniary indicators.