Diversified international investment offers investors higher expected returns and/ or reduced
risks vis-à-vis exclusively domestic investment. Here we will discuss the sources and sizes of
these gains from venturing overseas for portfolio investment, which is investment in equities and
bonds where the investor’s holding is too small to provide any effective control.
International Portfolio Diversifications can benefits investors as follows
The Advantages of International Portfolio Diversification
1. Spreading risk: Correlations between national asset markets
Because. Of risk aversion investors demand, higher expected returns for taking on investments
with greater risk. It is a well-established. Proposition in portfolio theory that whenever there advantages of diversification in abroad
.1 spread risk. The relationship between the market national assets
for risk aversion investors require higher expected return for the investment
.With greater risk. It is better in theory works that whenever a
defects in the relationship between asset returns have different risk is reduced by keeping only
.Part of the wealth in the property to any person More commonly by a selection of works that follow
anticipated return change of work the relationship between the return of investors return to success!The risk minimum expected return portfolio or anticipated return work the highest risk for
set except Ceteris paribus lower joined the relationship between the return from
.Different assets more useful the proportion of investment.