Home Bias Conscious And Intentional


    Even though there is general agreement on the importance of exposure to a variety of asset classes (dependent, of course, on investor-specific factors), there is less agreement on the role of foreign securities in a domestic portfolio, says a research paper from Vanguard. ‘The role of home bias in global asset allocation decisions’ says investors display a persistent and significant home bias, regardless of domicile, which often conflicts with the tenets of broad global diversification. It is interesting that this bias is often conscious and intentional, it says, with investors actively overweighting domestic holdings at the expense of foreign securities.