International Diversification Works (Eventually)

Posted: 11 Jun 2011

See all articles by Clifford S. Asness

Clifford S. Asness

AQR Capital Management, LLC

Roni Israelov

Independent

John M. Liew

AQR Capital Management, LLC

Multiple version iconThere are 2 versions of this paper

Date Written: June 9, 2011

Abstract

Critics of international diversification observe that it does not protect investors against short-term market crashes because markets become more correlated during downturns. Although true, this observation misses the big picture. Over longer horizons, underlying economic growth matters more than short-lived panics with respect to returns, and international diversification does an excellent job of protecting investors.

Keywords: equity investments, equity market valuation, return analysis, international equity investing, portfolio management, portfolio construction and revision, diversification issues

Suggested Citation

Asness, Cliff S. and Israelov, Roni and Liew, John M., International Diversification Works (Eventually) (June 9, 2011). Financial Analysts Journal, Vol. 67, No. 3, 2011, Available at SSRN: https://ssrn.com/abstract=1861362

Cliff S. Asness (Contact Author)

AQR Capital Management, LLC ( email )

Two Greenwich Plaza, 3rd Floor
Greenwich, CT 06830
United States
203-742-3601 (Phone)
203-742-3101 (Fax)

HOME PAGE: http://www.aqrcapital.com

Roni Israelov

Independent ( email )

United States

John M. Liew

AQR Capital Management, LLC ( email )

2 Greenwich Plaza
3rd floor
Greenwich, CT 06830
United States
(203) 742-3604 (Phone)
(203) 742-3104 (Fax)

HOME PAGE: http://www.aqr.com

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