Are foreign investors still beating the Finnish investors? Compering returns of foreign and domestic investors in Finland
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School of Business |
Bachelor's thesis
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Date
2016
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Mcode
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Rahoitus
Language
en
Pages
19
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Abstract
My study compares foreign and domestic investors’ performance in the Finnish stock markets during 2010-2016. I find that the Finnish investors had higher cumulative returns than the foreign investors. Also, the domestic investors have a higher expected Sharpe ratio. However, after conducting Fama-French three factor risk adjustment neither of the investment groups doesn’t have significant alphas. It seems that the investor groups have the same expected returns but their strategies and trading behaviour differ. This can be applied to the research of the home bias puzzle.Description
Thesis advisor
Lof, MatthijsKeywords
foreign investors' performance, domestic invetors' performance, home bias, behavioral finance