International diversification from a Swedish perspective
(2019) NEKH02 20182Department of Economics
- Abstract
- This study aims to investigate whether, and in that case how, international diversification gain exists in equity investment from a Swedish perspective. From a long-term perspective and with exchange rate taken into consideration, several attempts to find how a Swede should invest internationally and what impact it will have on the Swedish portfolio are made. To find evidence for which countries a Swedish investor should target, data for broad equity indices for the biggest developed and emerging markets between December 1994 and December 2017 are collected and then analyzed from a theoretical perspective, both separately and together. Principally, different international portfolios are compared with a purely Swedish one. It is also... (More)
- This study aims to investigate whether, and in that case how, international diversification gain exists in equity investment from a Swedish perspective. From a long-term perspective and with exchange rate taken into consideration, several attempts to find how a Swede should invest internationally and what impact it will have on the Swedish portfolio are made. To find evidence for which countries a Swedish investor should target, data for broad equity indices for the biggest developed and emerging markets between December 1994 and December 2017 are collected and then analyzed from a theoretical perspective, both separately and together. Principally, different international portfolios are compared with a purely Swedish one. It is also investigated whether it is appropriate to apply research made on the subject international diversification from an US perspective (which most of the existing literature are based on) on Sweden, and whether it would be more beneficial for Sweden, from an international diversification perspective, to be part of the Euro area.
The results of this paper suggest that even though the Swedish index alone has performed relatively well, international diversification is beneficial for the Swedish investor, mainly since it brings potential for increased risk reduction. It is also shown that international diversification research from an US perspective should be applied to Sweden with caution,
and that it from a risk-return perspective is an advantage for the Swedish investor to not be part of the Euro area. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8969092
- author
- Jansson, Christine LU
- supervisor
- organization
- course
- NEKH02 20182
- year
- 2019
- type
- M2 - Bachelor Degree
- subject
- keywords
- international, portfolio, diversification, Sweden
- language
- English
- id
- 8969092
- date added to LUP
- 2019-02-15 14:53:34
- date last changed
- 2019-02-15 14:53:34
@misc{8969092,
abstract = {{This study aims to investigate whether, and in that case how, international diversification gain exists in equity investment from a Swedish perspective. From a long-term perspective and with exchange rate taken into consideration, several attempts to find how a Swede should invest internationally and what impact it will have on the Swedish portfolio are made. To find evidence for which countries a Swedish investor should target, data for broad equity indices for the biggest developed and emerging markets between December 1994 and December 2017 are collected and then analyzed from a theoretical perspective, both separately and together. Principally, different international portfolios are compared with a purely Swedish one. It is also investigated whether it is appropriate to apply research made on the subject international diversification from an US perspective (which most of the existing literature are based on) on Sweden, and whether it would be more beneficial for Sweden, from an international diversification perspective, to be part of the Euro area.
The results of this paper suggest that even though the Swedish index alone has performed relatively well, international diversification is beneficial for the Swedish investor, mainly since it brings potential for increased risk reduction. It is also shown that international diversification research from an US perspective should be applied to Sweden with caution,
and that it from a risk-return perspective is an advantage for the Swedish investor to not be part of the Euro area.}},
author = {{Jansson, Christine}},
language = {{eng}},
note = {{Student Paper}},
title = {{International diversification from a Swedish perspective}},
year = {{2019}},
}