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The Bachelor Thesis examines the effects of the integration of environmental, social and governmental (ESG) criteria in equity funds on performance compared to conventional equity funds. For this purpose, a quantitative analysis is carried out which includes a detailed examination of 769 equity funds. The equity funds are divided into two different groups - ESG equity funds and conventional equity funds - and are analyzed for various financial ratios. The goal of the study is to illustrate the financial performance differences between ESG-focused equity funds and conventional equity funds and thus provide a scientific contribution to the academic debate on sustainable investments. Initially, the thesis delves into the central concepts of ESG, the historical development of investment funds, theoretical frameworks, and existing studies. The following analysis provides an insight into the relationship between ESG criteria and the performance of equity funds. It not only draws on two different ESG rating systems, but also provides a geographical breakdown. Although the work as a whole helps to develop a deeper understanding of sustainable investment and highlights potential implications for investors and the financial sector, the results of the analysis show that more research is needed in this area.
Analysis of Fintech Markets
(2023)
The technological advancement in the business sector, in particular in the banking world, forces the financial sector to adapt its services. The Fintech companies aim to cope with these advancements and change the money management for clients. The question that arises is how the FinTech companies have developed and if they are profitable. That is the reason for the research of the development of the Fintech companies theoretically and practically, focusing on their financial performance. The methodology used in this paper is for the first chapter gathering existing knowledge of previous studies and including law directives to underline the development and in the second chapter using the information available from the companies itself. One can conclude the development of the acceptance of digitalized banks have increased after the economic crisis in 2008. Furthermore, the regulatory systems have problems coping with the velocity of change and the income of new products and services. The practical analysis of the FinTech companies show, that they do have certain advantages for clients, but are not immune against economic volatility. Having analyzed existing companies is beneficiary for the research field, as for now no practical analysis of the companies have been done. Nevertheless, the limitation of this research is due to the fact of probable biased information from the companies.
While ESG investing has presented an impressive growth history within institutional investing in the past, this thesis aims to investigate whether impact investing could potentially mirror the ESG investing success story going forward. For that reason, the thesis analyses the past success of ESG investing and compares this to the less established investing practice of impact investing in order to find necessary requirements for the volume of impact investing to grow. After comparing the characteristics of ESG investing and impact investing and after analysing suitable asset classes and potential investors for both investment trends, four key success factors for the progress of institutional impact investing have been identified. These are (1) a general interest in society and the investment community for more direct social and environmental impact, (2) the existence of suitable investment products, (3) a regulatory framework that allows and incentivizes institutional investors to purchase impact investment products and (4) a mechanism with which impact investments products can be objectively classified and their impact can be objectively measured. While the first three success factors should not hinder the future growth of impact investing, the problem of objectively classifying and measuring an impact investment seems difficult to overcome in the near future.
The emergence of cryptocurrencies has sparked significant debate regarding their role in modern financial systems. This thesis addresses two main aspects of cryptocurrencies: their viability as an investment asset and their potential to replace conventional fiat money. It especially focuses on Bitcoin and digs into the multidimensional nature of cryptocurrencies. This study clarifies the conflict between the perceived potential of cryptocurrencies as a respectable form of investment and their perceived speculative nature, as seen by their relationship with gambling-like behavior, through a thorough investigation.
Examining Bitcoin's price volatility, market acceptance, and correlation with conventional financial assets are all important parts of the inquiry into the investment possibilities of this digital currency. The magic triangle of investing will be used as an approach to analyze the returns, liquidity and risks and compare Bitcoin with other investing assets.
Furthermore, this study examines the viability of Bitcoin, as a replacement for fiat money by reconstructing Friedrich August von Hayek's monetary theory. The analysis covers the underlying technologies of cryptocurrencies, the idea of decentralized ledger systems, and the possibility of creating a reliable and effective means of exchange. This study evaluates whether cryptocurrencies could overcome the constraints and difficulties of conventional fiat currencies by contrasting Hayek's theories with the distinctive characteristics of cryptocurrencies.
Abstract
In the last decade, green bonds have become one of the most prominent and popular
financing instruments for mitigating climate change. The purpose of this paper is to analyze the impacts of green bonds with regard to climate neutrality and compare their performance with conventional bonds. Therefore, the following research questions were answered: What are the latest developments in the green bond market? What is the present state of standardized regulations? How do green bonds perform compared to their conventional counterparts? How transparent and "green" is the current green bond market? The paper is based on a literature review in the theoretical part and a practical part illustrating an insight into the current green bond market through three case studies.
In the green bond market, which has been growing steadily since 2015, Europe's increasingly strong and prominent position is evident. With a global market volume of over $500 billion in 2021, there has been a substantial increase in market growth during the past few years. A large body of literature shows that green bonds do not exhibit significant differences in performance compared to their conventional counterparts. As the green bond market matures, the phenomenon of a green bond premium is slowly disappearing. Which is in line with the results of the case studies. The green bonds outperform the conventional bonds and achieve a higher return. Further, a lack of standardized regulations can be observed. There are not one but many voluntary standards and regulations. As a result, the actual sustainability and impact of green bonds are difficult to measure.
This thesis examines the existence and magnitude of the Dividend Month Premium in the German stock market over the period 1999 to 2021. The findings indicate that there appear to be significant positive abnormal returns in the lead-up to the ex-dividend date, which are reversed thereafter. This mispricing around a predictable event arises as a contradiction of the efficient market hypothesis and is driven by price pressure from dividend-seeking investors who are not exposed to additional risk compared to non-dividend periods. The asset pricing anomaly intensifies in times of economic uncertainty and is related to the level of dividend yield and liquidity. However, if firms decide to omit their dividend payments, the return premium disappears.
An average investor trying to allocate his wealth among multiple assets ideally has nearly infinite possibilities to do so. However, asset allocation strategies try to facilitate this process. Nevertheless, no consensus exists on which strategy is ideal and yields the best performance. Therefore, this paper aims to determine an ideal asset allocation strategy for an average investor by comparing two asset allocation strategies.
The focus is on comparing the practical application of Markowitz’s Modern Portfolio Theory (MPT), a sophisticated asset allocation strategy, with an equally weighted asset allocation, namely the 1/N strategy. The past performance of these two strategies is compared with the help of a calculation example based on historical data. The quantitative analysis covers three time periods of different lengths between 1991 and 2022. Also, the strategies are applied to portfolios with different amounts of assets during these periods. Although the existing literature is very controversial concerning the performance of the two strategies, this research shows a clear result. Compared to the 1/N strategy, this study’s findings show an outperformance of the MPT strategy during every period and each portfolio combination. However, the difference in performance regarding return and risk is minimal in most scenarios and would not significantly affect an average investor who invests over a long-term horizon.
Digitalization is currently taking place in all areas of the business environment. This thesis aims to provide an overview of digitalization in the field of controlling, specifically focusing on the use business intelligence (BI) dashboards. Embracing digitalization by implementing BI enables companies to transform the way in which data and information relevant for decision making is procured and managed. The utilization of a BI solution to conduct complex analyses is exemplified by the conceptualization and development of a BI dashboard for assessing the consolidation effect at Bosch Rexroth AG. The importance of designing an effective dashboard according to its purpose in a simple, clear and intuitive way as a front-end application of a BI solution is emphasized. Furthermore, five different potential roles for the controller that arise as digitization progresses are identified, all of which require an expansion of the controller's IT capabilities.
SPACs are an alternative way for companies to access the capital market. They have experienced a boom since 2020, and in the following year 613 SPACs raised more than $160 billion in the US. However, SPACs are controversial and have been criticized for bad performance and incentive misalignments. This bachelor thesis aims to examine whether the current US SPAC boom is a temporary phenomenon or whether SPACs represent a long-term alternative to the traditional IPO process. To answer this research question, a literature review and 14 semi-structured expert interviews were conducted to explore the reasons for the boom, the advantages and disadvantages for companies seeking to go public, and the winner and losers of the SPAC process. This work shows that SPACs had already gained acceptance in the market before the boom, and it argues that SPACs are a viable alternative to the traditional IPO process for young, risky companies due to the regulatory advantages and the support of SPAC sponsors. In addition, the majority of key SPAC stakeholders are winning in the SPAC process and are likely to continue to support the market in the future. At the same time, this paper finds that the Corona pandemic was an important catalyst for the SPAC market, but that the associated reasons for the boom will probably recede. Moreover, PIPE investors will be more selective in the future and sponsors without appropriate expertise and network will have to liquidate their SPACs more often. This bachelor thesis therefore concludes that SPACs will continue to exist. However, there will be fewer and higher quality SPACs in the future.
This thesis is motivated by the possibility for individuals to diversify their saving methods to allow for more financial safety, by investing into company stocks. If chosen well, stock investments offer attractive returns and prospects, however this choice can be daunting, and assistance may be required. In the context of other options that assist in decision-making related to stock options, this research aims to design and implement a relational database, that offers a transparent overview of financial information of stocks, developed to assist individuals in making decisions for investments in the stock market. The database should also be maintainable. After the design, implementation, and enhancement of the database with data, the database was tested for functionality, maintainability, and transparency. Then, application examples were constructed to examine the usability of the concept to assist with decision-making, aiming to create consistent positive returns within the created portfolios. It was found that the database fulfilled all desired characteristics and produced positive returns in the application examples. However, the ability of creating consistent outcomes was not given. These results indicate that the database can be used to organize stock-related information, however, is not usable to assist with decision-making.