Portfolio concentration and performance of institutional investors worldwide

Nicole Choi, Mark Fedenia, Hilla Skiba and Tatyana Sokolyk

Journal of Financial Economics, 2017, vol. 123, issue 1, 189-208

Abstract: Using data on security holdings for 10,771 institutional investors from 72 countries, we test whether concentrated investment strategies result in excess risk-adjusted returns. We examine several measures of portfolio concentration with respect to countries and industries and find that portfolio concentration is directly related to risk-adjusted returns for institutional investors worldwide. Results suggest, in contrast to traditional asset pricing theory and in support of information advantage theory, that concentrated investment strategies in international markets can be optimal.

Keywords: International investments; Institutional investors; Information advantage; Home bias; Diversification; Industry concentration (search for similar items in EconPapers)
JEL-codes: G11 G14 G15 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (75)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:123:y:2017:i:1:p:189-208

DOI: 10.1016/j.jfineco.2016.09.007

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