Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World

Using unique data on mutual fund portfolios with different investment scopes, we study the extent of international diversification. Mutual funds invest in a surprisingly limited number of stocks—about 100. The number of holdings from a given region declines as the investment scope broadens. Moreover...

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Main Authors:	Didier, Tatiana, Rigobon, Roberto, Schmukler, Sergio L.
Format:	Journal Article
Language:	en_US
Published:	MIT Press 2013
Subjects:	financial integration firm organization globalization international asset allocation mutual fund portfolios risk diversification
Online Access:	http://hdl.handle.net/10986/16213

id	okr-10986-16213
recordtype	oai_dc
spelling	okr-10986-162132021-04-23T14:03:28Z Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World Didier, Tatiana Rigobon, Roberto Schmukler, Sergio L. financial integration firm organization globalization international asset allocation mutual fund portfolios risk diversification Using unique data on mutual fund portfolios with different investment scopes, we study the extent of international diversification. Mutual funds invest in a surprisingly limited number of stocks—about 100. The number of holdings from a given region declines as the investment scope broadens. Moreover, unexploited gains exist from international diversification. Funds that invest globally could achieve better risk-adjusted returns by adding stocks held by more specialized funds within the same family. These findings are not driven by different sectoral allocations, lack of information or instruments, transaction costs, or different tail risks. Instead, organizational factors might play an important role. 2013-11-04T21:09:32Z 2013-11-04T21:09:32Z 2013-01-22 Journal Article Review of Economics and Statistics 0034-6535 10.1162/REST_a_00351 http://hdl.handle.net/10986/16213 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank MIT Press Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	financial integration firm organization globalization international asset allocation mutual fund portfolios risk diversification
spellingShingle	financial integration firm organization globalization international asset allocation mutual fund portfolios risk diversification Didier, Tatiana Rigobon, Roberto Schmukler, Sergio L. Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World
description	Using unique data on mutual fund portfolios with different investment scopes, we study the extent of international diversification. Mutual funds invest in a surprisingly limited number of stocks—about 100. The number of holdings from a given region declines as the investment scope broadens. Moreover, unexploited gains exist from international diversification. Funds that invest globally could achieve better risk-adjusted returns by adding stocks held by more specialized funds within the same family. These findings are not driven by different sectoral allocations, lack of information or instruments, transaction costs, or different tail risks. Instead, organizational factors might play an important role.
format	Journal Article
author	Didier, Tatiana Rigobon, Roberto Schmukler, Sergio L.
author_facet	Didier, Tatiana Rigobon, Roberto Schmukler, Sergio L.
author_sort	Didier, Tatiana
title	Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World
title_short	Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World
title_full	Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World
title_fullStr	Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World
title_full_unstemmed	Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World
title_sort	unexploited gains from international diversification : patterns of portfolio holdings around the world
publisher	MIT Press
publishDate	2013
url	http://hdl.handle.net/10986/16213
_version_	1764432523714101248

Unexploited Gains from International Diversification : Patterns of Portfolio Holdings around the World

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