This paper examines the performance and investment style of ethical mutual funds across the United States, the United Kingdom, and Germany. Using an international database of 103 ethical mutual funds, the study applies a Carhart multi-factor model to assess risk-adjusted returns and investment styles. The findings indicate no statistically significant differences in risk-adjusted returns between ethical and conventional mutual funds for the 1990–2001 period. Ethical mutual funds initially underperformed conventional funds but later caught up, delivering returns similar to those of conventional funds. The study also finds that ethical mutual funds tend to be more growth-oriented and less value-oriented compared to conventional funds. Additionally, ethical mutual funds are more exposed to small-cap stocks in the UK and Germany, while US ethical funds are more invested in large-cap stocks. The study also evaluates the incremental value of ethical benchmark indices in explaining ethical mutual fund returns, finding that standard indices are more effective than ethical indices. Overall, the results suggest that ethical mutual funds do not consistently outperform conventional funds in terms of risk-adjusted returns, and that ethical screening does not significantly affect fund performance. The study concludes that ethical mutual funds are a small part of the overall mutual fund market and that their financial performance is an important factor in their acceptance in the mainstream investment arena.This paper examines the performance and investment style of ethical mutual funds across the United States, the United Kingdom, and Germany. Using an international database of 103 ethical mutual funds, the study applies a Carhart multi-factor model to assess risk-adjusted returns and investment styles. The findings indicate no statistically significant differences in risk-adjusted returns between ethical and conventional mutual funds for the 1990–2001 period. Ethical mutual funds initially underperformed conventional funds but later caught up, delivering returns similar to those of conventional funds. The study also finds that ethical mutual funds tend to be more growth-oriented and less value-oriented compared to conventional funds. Additionally, ethical mutual funds are more exposed to small-cap stocks in the UK and Germany, while US ethical funds are more invested in large-cap stocks. The study also evaluates the incremental value of ethical benchmark indices in explaining ethical mutual fund returns, finding that standard indices are more effective than ethical indices. Overall, the results suggest that ethical mutual funds do not consistently outperform conventional funds in terms of risk-adjusted returns, and that ethical screening does not significantly affect fund performance. The study concludes that ethical mutual funds are a small part of the overall mutual fund market and that their financial performance is an important factor in their acceptance in the mainstream investment arena.