Covid-19 vaccines and investment performance: Evidence from equity funds in European Union

Abstract

In this paper, we analyze the impact of the marketing authorization of EMA-approved vaccines on the returns of equity funds in the EU. Using the event study methodology, we report that the introduction of all vaccines had a positive impact on the funds' returns. Higher abnormal returns were associated with the earlier vaccines, indicating the first-mover advantage and the abnormal returns were persistent across several event windows. The findings imply that equity markets welcomed the vaccine administration as an important pharmaceutical intervention to support the quasi-revival of business activities. Consequently, there was a significant uplift in the economic bottom line.