A new solution to investors' home bias

FTSE teams up with an Australian fund manager to promote a novel indexing method for institutional investors worldwide.

The problem of home bias is a hoary old chestnut in the world of investment. Pick a country, and find investors' equity holdings inordinately skewed to domestic securities, often far out of proportion to global benchmarks.

Hong Kong pension funds, for example, allocate on average 28% of their equities to local stocks, when Hong Kong comprises only 1% of global indices. This is hardly unique American institutions put up to 85% of their equities allocation into domestic stocks, when 50% would be more appropriate. Australia makes up 2% of a global equities index but superannuation funds invest over half their stock allocations domestically. And Japan, 8% of the global equities world, accounts for...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222