How Global is Your Mutual Fund? International Diversification from Multinationals

Irem Demirci, Miguel Ferreira (), Pedro Matos and Clemens Sialm

No 27648, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that mutual funds worldwide provide substantial international exposure through their domestic holdings of multinationals. An average domestic fund's international exposure increases by 32 percentage points when we consider international corporate diversification. We find that funds with higher indirect international exposure perform better in both the cross section and the time series. This outperformance is more pronounced among small fund families, and funds that invest in small stocks, growth stocks, and less developed capital markets. Our findings support the hypothesis that international diversification from multinationals reduces the transaction and information costs of investing abroad and captures fund manager skill.

JEL-codes: F23 G11 G15 G23 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-fmk and nep-ifn
Note: AP CF IFM
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published as Irem Demirci & Miguel A Ferreira & Pedro Matos & Clemens Sialm & Wei Jiang, 2022. "How Global Is Your Mutual Fund? International Diversification from Multinationals," The Review of Financial Studies, vol 35(7), pages 3337-3372.

Downloads: (external link)
http://www.nber.org/papers/w27648.pdf (application/pdf)

Related works:
Journal Article: How Global Is Your Mutual Fund? International Diversification from Multinationals (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:27648

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w27648

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().