Social Impact Investments (SII) intentionally aims at generating social impact and financial return.
Portfolio diversification is one of the under-investigated areas in SII literature. The aim of this paper is to fill this
gap by conducting a preliminary investigation of social impact firms (SIF) contribution to portfolio risk and
performance. For the purpose of this paper, we use a sample of SIF members of the London Social Stock
Exchange who are publically listed and two contrast samples of traditional firms (non-SIF). To carry out the
analysis, we employed methodology based on Markowitz (1952a, 1952b) and Sharpe (1963). The paper may
provide useful insights for asset managers and investors involved in portfolio choice evaluation and policy makers
interested in fostering development of the social impact market
