Exportweltmeister: Germany’s foreign investment returns in international comparison

Franziska Hünnekes, Maximilian Konradt, Moritz Schularick, Christoph Trebesch and Julian Wingenbach

Open Access Publications from Kiel Institute for the World Economy from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Germany is a world champion in exporting capital (“Exportweltmeister”). Few countries have invested larger amounts of savings abroad. However, we show that Germany plays in the third division when it comes to investment performance. We construct a comprehensive new database of foreign investment returns for 13 advanced economies going back to the 1970s. Germany’s foreign returns were 2 to 5 percentage points lower, per year, than those of comparable countries. Germany also earns significantly less within asset classes, especially for equities and FDI. These aggregate results are confirmed when using return data from 50,000 mutual funds worldwide. German investment funds are worse at stock picking and at timing the market than their international peers. This is particularly true for the ”Big 6” German mutual fund companies. German households would have fared much better with a passive investment strategy.

Keywords: International Capital Flows; Foreign Assets; Investment Returns (search for similar items in EconPapers)
JEL-codes: F21 F30 F31 F36 G15 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ifn
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkie:318206

DOI: 10.1016/j.jinteco.2025.104056

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