NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

U.S. International Equity Investment and Past and Prospective Returns

Stephanie E. Curcuru, Charles P. Thomas, Francis E. Warnock, Jon Wongswan

NBER Working Paper No. 16677
Issued in January 2011
NBER Program(s):   IFM

Counter to extant stylized facts, using newly available data on country allocations in U.S. investors' foreign equity portfolios we find that (i) U.S. investors do not exhibit returns-chasing behavior, but, consistent with partial portfolio rebalancing, tend to sell past winners; and (ii) U.S. investors increase portfolio weights on a country's equity market just prior to its strong performance, behavior inconsistent with an informational disadvantage. Over the past two decades, U.S. investors' foreign equity portfolios outperformed a value-weighted foreign benchmark by 160 basis points per year.

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This paper was revised on December 5, 2011

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Document Object Identifier (DOI): 10.3386/w16677

Published: Curcuru, Stephanie E., Charles P. Thomas, Francis E. Warnock, and Jon Wongswan. 2011. "US International Equity Investment and Past and Prospective Returns." American Economic Review, 101(7): 3440–55. citation courtesy of

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