Home country bias is the tendency of investors to over-allocate to their home market, which typically results in negative alpha; for example, while the UK represents only about 6% of the global equity market, many UK investors allocate 40-50% of their equities to UK stocks, effectively 10x their neutral exposure due to familiarity, local presence, and absence of currency risk.
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Do you have home country bias?Ajouté :
Home country bias is the tendency of people to over-allocate to their home market.
That's been a negative alpha, unfortunately. For instance, if you're British and you're living in London, I am in London right now.
Um the UK is only about 6% of the global equity market.
Mhm. But a lot of UK private bankers, a lot of UK families are allocating, you know, 40 to 50% of their equities into the UK.
>> So, you're not in doubling down.
You're almost 10x-ing the neutral exposure because you know, the names are more familiar to you, because you're local, because there's no currency risk to worry about.
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