Vinnare av Compricers Ekonomistipendium 2021

Vi på Compricer brinner för att hjälpa svenska hushåll till en bättre privatekonomi. En del i det arbetet innebär att sprida kunskap om frågor som kan påverka dig och din plånbok. Inför 2021 bestämde vi oss därför för att inrätta ett stipendium med syftet att premiera duktiga studenter i landet som kommit med nya upptäckter inom vårt område.

Vi fick in mängder av ansökningar och när juryn satte sig ned för att gå igenom alla fantastiska bidrag var det till slut en som stod som segrare.
 

Vinnare: Lien Hoang

Lien Hoang, då student på Handelshögskolan vid Göteborgs universitet och numer riskanalytiker på en av Sveriges största banker, kunde visa att det finns ett ekonomiskt incitament att investera i bolag som kan visa upp en god utveckling inom hållbarhetsfrågor.

ESG, en förkortning för Environmental, Social, and Corporate Governance (på svenska: miljö, socialt ansvar och bolagsstyrning) är i korthet ett mått som används för att utvärdera bolag utifrån hur hållbara de är ur olika aspekter. Betyget ges från 0–100 och kallas för ett bolags ESG-score.

I uppsatsen ESG Integration: ESG Score Momentum Factor as Asset Characteristic and Optimal Parametric Portfolio - An Empirical Result of The US Stock Market redogör Lien för hur bolag som uppvisar en förbättring i sin ESG-score gett en högre avkastning än övriga bolag på den amerikanske aktiemarknaden mellan åren 2008–2020. En insikt som kan vara till glädje för dig som vill investera i hållbarhet och samtidigt tjäna pengar på det.

Vi säger stort grattis till Lien som vinnare av Compricers Ekonomistipendium 2021 och en check på 20 000 kronor!

Här följer en intervju på engelska med vinnaren:

1) Congratulations Lien! How does it feel to be the first winner of the Compricers Scholarship in Economics?

Thank you very much! It is a great honor for me to be the first winner of the Compricers’ best thesis award. This prize extremely acknowledges my thesis work toward sustainable investment. It brings more self-confidence and helps me to attain success in the future. I am exceedingly appreciative of the award your good company has presented to me.

2) In short. What are your key findings in your research?

My report examines the opportunities of ESG information within the context of investment decision-making, explores its integration into portfolio management and investment products. It shows how financial and non-financial information can be used to determine investment strategies, even when it involves large-scale assets portfolio with high dimensional characteristics.

The report shows that integrating the ESG information into investment strategies would help investors boost portfolio returns. Moreover, it indicates that investment strategies that focus on the firms with high ESG score changes outperform those with high ESG scores, especially in no short-sale constraint.

Once again, it affirms that integrating ESG information into investment decisions is not simply about the sustainable issue – it is about profitable too.

3) Sustainability is of the utmost importance and one of the hottest topics in the world at the moment. Your research shows that individual investors can benefit by using ESG information in their investment strategy. How would you recommend a private investor to incorporate ESG into their investment plans?

Even though ESG investment has become a more common practice among institutional investors, it’s undeniable that integrating the ESG factor into investment strategy still challenges individual investors. The challenges may be either related to accessing ESG data, approaching methods, and available analyzing tools.

I believe private investors can start building their investment portfolios with ESG screening based on their own preferences. The parametric method that sets the weights as a linear function of asset characteristics, which is used in my report, can be a simple way to run the target allocation, but with suitable tools. The easier way can be best-in-class (top ESG score, top ESG changes, or maybe top changes by each E, S, G component) investment. Equal weight allocation could be considered as a simple approach in this case.

4) Your results show that an investor should value changes in the ESG score more than the score itself. Can you elaborate more on that?

Yes, exactly. My report shows that optimal Sharpe Ratio investors would overweight company’s size and ESG Score changes while underweight ESG Score in general. It recommends that an investor seeking better risk-adjusted returns should allocate more funds to the firms that have improved their ESG performance in the past one year to 18 months, rather than firms with high ESG scores.

5) Why is it that companies that improve their ESG score also tend to perform better on the stock market, do you believe?

It is believed that high ESG score companies tend to have higher market values, which means that big companies with high ESG scores tend to be less volatile, or say more stable, in terms of ESG scores and financial performance. I believe companies that focus on improving ESG performance tend to be growing companies; investing in resilience program related to ESG metric allow those firms to control risks better.

This ESG focusing action also attracts some investors concerned about the potential ESG development trend of their investments; by snowball effect, it makes their actions more attractive.

6) Today you work as a risk analyst at one of the largest banks in Sweden. What does a risk analyst do?

As a risk analyst, I view and analyze risks from many different perspectives. I’ve recently joined the bank’s Balance Sheet Strategy and Analytics team within Group Treasury. Our team is involved in different interesting areas, including Balance Sheet analytics & strategic advice, supporting the Balance Sheet & financial result optimization, providing market risk analysis, and strengthening the first line of defense in risk management activities. 

At Group Treasury, we also have many forums discussing about sustainability investments and green products. I am confident that sustainable finance will further extend its impact in the coming years.

Thank you for your time Lien and congratulations yet again!
 

Om stipendiet

Compricers Ekonomistipendium delas varje år ut till den bästa uppsatsen inom privatekonomi. Stipendiet är värt 20 000 kronor och kan sökas av dig som skrivit en C- eller D-uppsats vid en högskola eller ett universitet i Sverige under 2022.

Läs mer och ansök till Compricers Ekonomistipendium