Investing in Mutual Funds : A Study of the relationship between net subscriptions to Finnish registered equity funds and stock indices from 2008 to 2014
Marttila, Johanna (2015)
Metropolia Ammattikorkeakoulu
2015
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201504244965
https://urn.fi/URN:NBN:fi:amk-201504244965
Tiivistelmä
This research investigates the relationship between net subscriptions to Finnish equity funds in 2008-2014 and four chosen stock indices, when any other factors are not taken into account. To define the relationship, coefficient of correlation is used. To understand the concepts of fund investing, net subscription, correlation and investor behaviour, the literature review offer a closer look into the basic concepts and theories behind these.
Mutual fund investing has become more popular in Finland which can be seen in increased investments to mutual funds. After the negative year of 2008, net subscriptions have been growing steadily reaching the peak of 8.6 billion euros of money invested in mutual funds in 2014.
When people make their investment decisions, they do not always behave rationally. Finnish investors react easily to market changes and in fear of losing money they redeem money from funds, when prices start to drop and invest again only when prices start to rise. This does not allow investors to earn high revenues from their investments. Results of the analysis indicate that there is strong positive correlation between the net subscriptions and stock indices. This means, that net subscriptions follow the changes on stock markets, which also reflects the investor behaviour in Finland.
Mutual fund investing has become more popular in Finland which can be seen in increased investments to mutual funds. After the negative year of 2008, net subscriptions have been growing steadily reaching the peak of 8.6 billion euros of money invested in mutual funds in 2014.
When people make their investment decisions, they do not always behave rationally. Finnish investors react easily to market changes and in fear of losing money they redeem money from funds, when prices start to drop and invest again only when prices start to rise. This does not allow investors to earn high revenues from their investments. Results of the analysis indicate that there is strong positive correlation between the net subscriptions and stock indices. This means, that net subscriptions follow the changes on stock markets, which also reflects the investor behaviour in Finland.