What is Home Bias?
Home Bias The tendency of investors to allocate a disproportionately large share of their portfolios to domestic assets, contrary to the principles of global diversification.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Home Bias” Used in Practice?
Home bias can expose portfolios to idiosyncratic domestic risks and reduce the benefits of international diversification.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Home Bias?
The tendency of investors to allocate a disproportionately large share of their portfolios to domestic assets, contrary to the principles of global diversification.
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