- Traditional diversification is not what it used to be.
- There are increasingly greater correlations between U.S. and non-U.S. equities.
- Diversification today comes through a broader opportunity set.
- Investors might reconsider rigid geographic allocations in favor of flexible global mandates.
Globalization and an increase in open trade are having a significant impact on the universe of investment opportunities, meaning that many companies headquartered in Europe, Japan and the United States don’t necessarily generate most of their revenue in their home country like they once used to.
In our view, this change in the landscape of investment opportunities forces a re-evaluation of whether investment portfolios should be built along strict regional lines or a corporation’s place of domicile.