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Professor Butler says diversification by industry and sector suffers from the same quirk as international diversification.
As a result, international diversification falters just as investors need its much-promoted benefits.
The professors' findings do not justify the elimination of international diversification.
"I adamantly believe that there are benefits from international diversification that have not been fully appreciated," Mr. Cavaglia said.
Personally, I hope the professors' research makes journalists stop writing about the mysterious failure of international diversification during market corrections.
"How long will Tesco persist with its value-destroying international diversification?" asked Investec's Dave McCarthy the other day.
And during bearish markets, when an investor most needs that insurance, international diversification provides the least protection.
In particular, the research on international diversification and the timing and speed of entering international markets is closely examined.
These exchange-traded contracts further reduced costs, improved domestic diversification, and provided expanded opportunities for international diversification.
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International equity diversification is also important, and the Artemis fund is invested in around 90 companies from 28 countries.
This paper analyses stock market co-movements around recent crises and explores the international portfolio diversification benefits available for UK investors holding a portfolio in the BRICS and MIST emerging markets.
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