The Home(-Sickness) Bias of International Holdings

50 Pages Posted: 16 Dec 2012 Last revised: 9 Feb 2017

Date Written: May 2016


U.S. mutual funds invest significantly more in countries that have a strong associated ethnic group population near the funds' offices. Moreover, the ethnicity of the mutual fund's manager is strongly predictive of the mutual fund's international holdings. Mutual funds that take advantage of the information generated by the local ethnic groups outperform otherwise similar funds by more than 1.5% per quarter in their international holdings. This paper documents a new form of home bias, sheds light on a new information channel for international investment decisions, and contributes to the debate on whether mutual fund managers have skills.

Keywords: Mutual funds, home bias, international investment

JEL Classification: G11, G15, G23

Suggested Citation

Nguyen, Quoc, The Home(-Sickness) Bias of International Holdings (May 2016). Available at SSRN: or

Quoc Nguyen (Contact Author)

DePaul University ( email )

1 East Jackson Blvd.
Chicago, IL 60604
United States

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