A group of MSc in Finance students have had the conclusions of their portfolio construction assignment published in The International Journal of Economic and Financial Issues, a peer reviewed journal. Raphael Faessler, Milenko Josavac, Christophe Dehut and Daniel Broby, their supervisor, were joint authors of the paper entitled “The impact of the (2011) devaluation of the Swiss Franc on Eurozone Equity Benchmark Diversification”.
The students investigated the diversification benefits of adding Switzerland to a Eurozone equity portfolio, both before and after the removal of Swiss franc's fixed exchange rate to the euro. Whilst the benefits of diversification are not new, the dramatic changes in financial markets have led many to review and reassess the traditional thinking on such matters.
Switzerland, having been seen as a safe haven and having a strong currency, saw a dramatic devaluation in 2011. The re-pricing of its currency made domestically priced assets significantly more attractive to international investors, although left earlier investors with portfolio exchange losses. The students demonstrated that, despite taking this regime change into account, Eurozone investors would still benefit from placing part of their investments in Swiss equities.
Daniel Broby who taught the students portfolio management said, "The publication of their conclusions highlights the practical nature of the assignment and rigour of the coursework."
The students used financial data from Bloomberg to construct mean variance efficient frontiers, adapting theory to real world practical problems. They compared the outcome of the mean-variance portfolio with an equally weighted portfolio composed out of a screened sample of both Swiss value and growth stocks.
The MSc in Finance is taught in the Department of Accounting and Finance, ranked 1st in the UK in its field by the Complete University Guide Subject League Table for 2017.
The course content of the MSc in Finance is officially recognised by the CFA Institute. According to its Head of University Relations, Neil Govier, CFA, “Students in these programmes study the Candidate Body of Knowledge, which includes the core knowledge, skills, and abilities identified by practitioners worldwide as essential for successful practice.”