International Variations in the Benefits of Feasible Diversification Strategies

Wan-Jiun Paul Chiou and Vigdis W Boasson ()
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Wan-Jiun Paul Chiou: Finance Group, Northeastern University, 360 Huntington Ave., Boston, MA 20115, USA
Vigdis W Boasson: Central Michigan University, Mt Pleasant, MI 48859, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2015, vol. 18, issue 04, 1-38

Abstract: We examine the international variations in portfolio diversification benefits from an angle of global wealth management. We directly model the impact of widely observed phenomenon, home bias and no short-sales, on international investments with the aim to establish feasible diversification strategies and to identify which countries and/or regions are target markets for wealth management. Our results indicate that investors in less developed countries, particularly in East Asia and South Asia, reap greater benefits from international diversification than investors in the rest of the world. These benefits are particularly noticeable in volatility reduction. Our results reveal important insights for global wealth management.

Keywords: Home-biased investment; short-sales; global wealth management (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0219091515500228

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