Unit Trusts in Singapore: Degree of Diversification

James Chong, Chow Kiat Lim and Ee Toh Chia
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James Chong: James Chong, 60 Mimosa Walk, Singapore 807906, The Republic of Singapore.
Chow Kiat Lim: The Government of Singapore Investment Corporation
Ee Toh Chia: Schroder Investment Management (Singapore) Pte Ltd

Journal of Interdisciplinary Economics, 1997, vol. 8, issue 3, 177-185

Abstract: This study examines the degree of diversification of the funds in Singapore. The R-square statistic was employed as a measure for the degree of diversification. The findings generally indicated that the local funds were not well-diversified. Various explanations are given to account for this low level of diversification, as indicated by a low R-square statistic. This study also addresses some definitional and conceptual issues relating to diversification that affect the propriety of using the R-square statistic as a measure of diversification. More specifically, Markowitz’s Modern Portfolio Theory is introduced to illustrate the difference between naive and efficient diversification.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jinter:v:8:y:1997:i:3:p:177-185

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