International Diversification

  • 16 May
    Investing Down Under

    Investing Down Under

    • Australia has a stable and transparent economy, is rich in natural resources and the AUD currently looks cheap.
    • The Australian stock index consists of mostly financials but all have excellent ratings.
    • Only 0.09% of the S&P 500 revenues are generated in Australia therefore Australia provides additional international diversification.

    Introduction

    Australia is a country with a population of approximately 23.5 million people, highly developed with a GDP of $47,186 per capita, low unemployment rate of 6.1% and low government debt at 35% of GDP (US 125.3% of GDP). The long term interest rate is at 1.75% and the country is ranked in 13th place on the global doing business list. The Australian economy grew 3% in 2015 and it is dominated by the service sector representing 68%, followed by the mining sector that represents 7% of the economy. The above seems stable and therefore this article is going to provide an analysis about the potential risks and rewards of investing in Australia. More →

  • 22 Apr
    On International Diversification

    On International Diversification

    • Markets are more correlated in the short term but strongly diverge in the long term.
    • Currency movements further fuel international divergence.
    • Being overweight a certain market or currency means carrying additional risks that could be removed by international diversification.

    Introduction

    One issue that is more often off than on investors’ minds is international diversification. Historically, cross-country equity correlations have been far from perfect but they are becoming more correlated in recent times. The higher correlation is not a reason to shun international diversification. More →

1 3 4 5 6
Search