Investor Benefits from International Diversification
Title | Investor Benefits from International Diversification PDF eBook |
Author | Mikael Gustafsson |
Publisher | |
Pages | 34 |
Release | 1985 |
Genre | |
ISBN |
Benefits of International Diversification for a Swiss Investor
Title | Benefits of International Diversification for a Swiss Investor PDF eBook |
Author | Simon E. Öhri |
Publisher | |
Pages | 118 |
Release | 2010 |
Genre | |
ISBN |
Investor Benefits from International Portfolio Diversification
Title | Investor Benefits from International Portfolio Diversification PDF eBook |
Author | Sheldon Novack |
Publisher | |
Pages | 338 |
Release | 1973 |
Genre | Investments |
ISBN |
Multinationals and the Gains from International Diversification
Title | Multinationals and the Gains from International Diversification PDF eBook |
Author | Patrick F. Rowland |
Publisher | |
Pages | 74 |
Release | 1998 |
Genre | Diversification in industry |
ISBN |
One possible explanation for home bias is that investors may obtain indirect international diversification benefits by investing in multinational firms rather than by investing directly in foreign markets. This paper employs mean-variance spanning tests to examine the diversification potential of multinational firms and foreign market indices for investors domiciled in Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. We find that in most countries and most time periods, the portfolio of domestic stocks spans the risk and return opportunities of a portfolio that includes domestic and multinational stocks. However, there is weak evidence that U.S. multinationals provided global diversification benefits in the full 1984-92 sample and in the post-1987 subsample. We also find that the addition of foreign market indices to a domestic portfolio - inclusive of multinationals - provides diversification benefits. The economic importance of the shift of the portfolio frontier - measured as the utility gain from diversification - varies considerably from market to market and often reflects the benefits of large short positions in certain markets.
Diversification
Title | Diversification PDF eBook |
Author | Mark Armour |
Publisher | |
Pages | |
Release | 1992 |
Genre | Capital |
ISBN |
The Benefits of International Diversification
Title | The Benefits of International Diversification PDF eBook |
Author | Lorne N. Switzer |
Publisher | |
Pages | 43 |
Release | 2015 |
Genre | |
ISBN |
This paper examines the benefits of international diversification for US investors, while accounting for market development, corporate governance, market cap effects, and structural change across countries over period August 1996-July 2013. Improved risk adjusted returns are obtained from a diversified portfolio consisting of a mix of developed and emerging countries. Additionally, we find that diversification benefits are not significant for most of the small-cap foreign assets when an investor already holds position in corresponding countries large-cap assets. Diversification benefits based on the governance effectiveness of a country's companies are not ubiquitous. We find that economically significant improvements in risk-return performance can be attained by adding large caps of developed countries with high and low overall Governance Metrics International (GMI) ratings and large and small caps of emerging countries with low overall GMI ratings to the investment universe containing the assets of common law developed countries. However, diversification benefits are economically significant only for large and small caps of low GMI emerging countries when short selling is not allowed.
Shareholder Benefits of International Diversification
Title | Shareholder Benefits of International Diversification PDF eBook |
Author | Sean C. Rothermel |
Publisher | |
Pages | 30 |
Release | 2014 |
Genre | |
ISBN |