In the summer term 2025, we are offering a Master-level seminar with topics from asset pricing and investing.

Many variables have been proposed for forecasting stock market returns, e.g., the dividend yield or the price/earnings ratio. However, most of these variables have no lasting predictive power. Combination methods seemed to provide a remedy here. Forecast combination involves averaging the forecasts made with individual variables. Sebastian Denk and Gunter Löffler have now shown that these combination methods cannot be relied on either. They do not provide any added value when forecasting the US stock market. Curious? The article appears in the Review of Asset Pricing Studies and is also available here.

Green bonds are issued to finance projects that support the environment, in particular by reducing carbon emissions. Issuance of green bonds has grown significantly over the years. But do they really help the environment in the way many investors hope? In a paper to be published in the Journal of Banking and Finance, Mona Elbannan and Gunter Löffler examine this question through an empirical study.  Their findings suggest that green bonds can help companies finance carbon reductions, but that the impact is only evident for companies with financing difficulties. The analysis therefore suggests that investors concerned about the impact of their investments may benefit from screening green bond issuers according to their financial needs.