Look Abroad To Reduce Local Risks: Country Funds Add Geographic Diversification

Investors typically hold stocks, bonds and funds that are tied to their home country. This preference for domestic securities, called home bias, has served Canadians and Americans well over the long term. Many of us make no effort to invest beyond these two countries, arguing that global diversification, if it is desirable at all, can be achieved by owning shares in giant U.S. corporations and Canadian resource companies that have operations around the world. After all, the managers of these...