The Comparison of Sustainable Mutual Funds in US, Germany, and Nordic Regions

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Volume Title

School of Business | Bachelor's thesis

Date

2023

Department

Major/Subject

Mcode

Degree programme

(Mikkeli) Bachelor’s Program in International Business

Language

en

Pages

23

Series

Abstract

Sustainability issues have been increasingly receiving more attention during the recent decades with financial institutions rapidly developing environmental and social investments. Many studies have been conducted on effectiveness of such investment options in relation to regular companies and funds as well as among global markets. With that, this thesis research investigates mutual funds in three – US, Germany and Nordic regions using Morningstar Direct database to compare their performances through non-crisis and crisis periods. The sample resulted in 26 funds and researched time covers years from 2016 to end of 2022. The full sample period is divided into pre-pandemic (2016 to 2019) and post-pandemic (2020 to 2022) years. The results indicate that US had better sustainability scores in addition to better performance, especially during the pre-pandemic period. In 3 sub-sample periods of 2020, however, Nordic funds appeared to perform not significantly different from US funds in terms of relative Sharpe ratio as well as lower return volatility. Overall, German funds presented lower profitability and higher price fluctuations over the whole sample period while US funds appeared to be generally more favourable with Nordic funds showing similar resilience in times of high market uncertainty.

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Thesis advisor

Inci, Can

Keywords

mutual funds, sustainability, performance, Nordic countries, Germany, US

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