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COVID-19 and safer investment bets

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  • Singh, Amanjot

Abstract

I examine the spillover effects across the three different long-short portfolio indices during the COVID-19 pandemic. The relative outperformance of the ESG portfolio, reported by Nofsinger and Varma (2014) and Lins et al. (2017), comes from the fact that the probability of its returns getting affected by the other safer investment strategies increases during an economic slowdown. It implies that investors become more attentive to corporate fundamentals – causing capital flowing away from the defensive and EAFE portfolios to the ESG portfolio during crisis periods. Investors find refuge in the ESG approach as it focuses on the long-run sustainability of firms.

Suggested Citation

  • Singh, Amanjot, 2020. "COVID-19 and safer investment bets," Finance Research Letters, Elsevier, vol. 36(C).
  • Handle: RePEc:eee:finlet:v:36:y:2020:i:c:s1544612320307583
    DOI: 10.1016/j.frl.2020.101729
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    References listed on IDEAS

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    Cited by:

    1. Arkadiusz J. Derkacz, 2020. "Fiscal, Investment and Export Multipliers and the COVID-19 Pandemic Slowdowns Uncertainty Factor in the First Half of 2020," Risks, MDPI, Open Access Journal, vol. 8(4), pages 1-21, November.

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    More about this item

    Keywords

    Defensive; EAFE; Emerging markets; ESG; Return Spillover;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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