Relevance of Exchange Traded Funds for Conservative Investors to Achieve Real Capital Preservation During Policy of Low Interest Rates

Inhaltsverzeichnis (Table of Contents)

• 1. INTRODUCTION.
• 1.1 Problem Description
• 1.2 Objectives.
• 1.3 Scope of Work.
• 2. RECENT FINANCIAL INVESTMENT ENVIRONMENT.
• 2.1 Monetary Policy Measures of European Central Bank......
• 2.2 Coherence of Inflation, Deflation and Money Investment..
• 2.3 Deduction for Investment Decisions.
• 3. FUNDAMENTALS OF CONSERVATIVE INVESTING
• 3.1 Investment Principles
• 3.1.1 Mindset Towards Safety and Risk...
• 3.1.2 Investment Objective
• 3.1.3 Time Horizon...
• 3.1.4 Pricing.
• 3.1.5 Choice of Investments..
• 3.2 Distinction From Balanced Investors.
• 3.3 Distinction From Aggressive Investors ..
• 4. AN INTRODUCTION TO EXCHANGE TRADED FUNDS.
• 4.1 History and Development
• 4.2 Definition and Characteristics.
• 4.3 Differentiation from Mutual Funds…..........\li>
  • 4.3.1 Management Technique .....
  • 4.3.2 Stock Exchange Trading.
  • 4.3.3 Cost Structure.
  • 4.3.4 Transparency
• 4.4 Index Tracking Techniques.....
• 4.4.1 Full Physical Replication.
• 4.4.2 Partial Physical Replication.........
• 4.4.3 Swap-Based Synthetic Replication
• 4.5 ETF Types.
• 4.5.1 Bond ETF
• 4.5.2 Money Market ETF.
• 4.5.3 Commodity ETF.
• 5. EVALUATION FOR CONSERVATIVE INVESTORS...
• 5.1 Change of Investment Mindset....
• 5.2 Performance Analysis
• 5.2.1 Interest Development of Savings Accounts in Germany......
• 5.2.2 Performance of ETFs Tracking the German Stock Market.
• 5.2.3 Evaluation of Performance Results.......
• 5.3 Pricing Analysis .....
• 5.4 Generic Investment Chances.
• 5.4.1 Diversification with Reasonable Pricing
• 5.4.2 High Liquidity Through Trading Flexibility.
• 5.4.3 Investment Transparency.....
• 5.5 Generic Investment Risks....
• 5.5.1 Volatility in Underlying Indexes
• 5.5.2 Inflexible Fund Holdings
• 5.5.3 The Right Choice.
• 6. RECOMMANDATIONS FOR APPROACHING ETF INVESTMENTS .........
• 6.1 Determination of Investment Type and Risk Disposition .....
• 6.1.1 Lump Sum..........\li>
• 6.1.2 Savings Plan..\li>
• 6.2 Definition of Investment Time Horizon.........
• 6.3 Tracking of Underlying Index.
• 6.4 Choice of ETF Investment Company.
• 6.5 Identifying Cost-Efficient ETFs.
• 7. CONCLUSION.......
• 7.1 Target Achievement...
• 7.2 Prospects…......

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This bachelor thesis aims to investigate the relevance of Exchange Traded Funds (ETFs) for conservative investors seeking real capital preservation during the period of low interest rates. The study focuses on the investment characteristics of ETFs, analyzing their suitability for investors with a risk-averse profile. It examines the potential benefits and challenges of using ETFs as a tool for capital preservation in a low-interest rate environment.

• Conservative investment strategies in a low-interest rate environment
• Characteristics and benefits of Exchange Traded Funds (ETFs)
• Performance analysis of ETFs for capital preservation
• Risk assessment and mitigation strategies for ETF investments
• Recommendations for approaching ETF investments for conservative investors

Zusammenfassung der Kapitel (Chapter Summaries)

• Chapter 1: Introduction: This chapter outlines the problem statement, research objectives, and scope of the thesis. It highlights the challenges faced by conservative investors in a low-interest rate environment and sets the context for exploring the potential of ETFs as a viable investment strategy.
• Chapter 2: Recent Financial Investment Environment: This chapter examines the prevailing economic and financial conditions that influence investment decisions, including the monetary policy measures of the European Central Bank and their impact on inflation, deflation, and investment opportunities.
• Chapter 3: Fundamentals of Conservative Investing: This chapter defines the core principles and characteristics of conservative investing, including risk tolerance, investment objectives, time horizon, and investment selection criteria. It also differentiates conservative investors from balanced and aggressive investors.
• Chapter 4: An Introduction to Exchange Traded Funds: This chapter provides an overview of ETFs, covering their history, definition, characteristics, and differentiation from mutual funds. It discusses various index tracking techniques used by ETFs, such as full physical replication, partial physical replication, and swap-based synthetic replication. The chapter also explores different types of ETFs, including bond, money market, and commodity ETFs.
• Chapter 5: Evaluation for Conservative Investors: This chapter examines the suitability of ETFs for conservative investors, evaluating their potential benefits and risks. It analyzes performance data of ETFs tracking the German stock market and compares them to the performance of traditional savings accounts. The chapter also explores the advantages of ETFs for conservative investors, such as diversification, liquidity, and transparency, while highlighting potential risks related to underlying index volatility, inflexible fund holdings, and the importance of making informed investment decisions.
• Chapter 6: Recommendations for Approaching ETF Investments: This chapter provides practical recommendations for conservative investors seeking to incorporate ETFs into their portfolios. It addresses key considerations, such as investment type, risk disposition, time horizon, choice of ETF investment company, and identifying cost-efficient ETFs.

Schlüsselwörter (Keywords)

This bachelor thesis focuses on the concept of conservative investing, specifically in the context of low interest rates. The main keywords include Exchange Traded Funds (ETFs), capital preservation, risk aversion, investment strategy, performance analysis, and portfolio diversification. The study examines the suitability of ETFs for conservative investors and explores the potential benefits and risks associated with this investment approach.