FYI: t is a well-known fact that investors skew their equity exposures toward their home country – that is, they exhibit a home country bias. According to data from the IMF’s Coordinated Portfolio Investment Survey,1 US investors allocated over 70% of their equity assets to the US even though based on market capitalization the US represents less than 50% of the opportunity set. This by no means is a US-only phenomenon. Canadian and Australian investors exhibit similar levels of concentration of equity exposures (60%-70%) in their domestic markets despite these markets representing only 3.3% and 2.4% of the global opportunity set based on their respective weights in the MSCI ACWI index. The recent strong returns of US vs. non-US stocks is most certainly at the top of the list in explaining the strong preference many currently harbor for US equities.
Regards,
Ted
https://www.advisorperspectives.com/commentaries/2017/05/18/america-is-great-home-country-bias-ain-t
