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• Lectura Académica - Las Carteras Internacionales Baten a las Nacionales

INTERNATIONAL REGIONS: 1970 - 2005
Expanding the set of assets in a portfolio to include international securities can greatly improve the risk/return tradeoff of investment opportunities.
An efficient frontier is the line that connects the combinations of securities that maximize expected return for a given level of expected risk (or that minimize expected risk for a given level of expected return). The comparison of the two efficient frontiers in this image makes a strong case for global diversification.
Notice that by expanding the set of domestic portfolios to include stocks from other countries and regions, you can improve the risk/return tradeoff of investment opportunities. In other words, for the period under examination an investor could have achieved higher returns at given levels of risk.
The improvement in the risk/return tradeoff is due to the low correlation of the international asset classes with the U.S. asset classes. As a result, points on the global frontier offered higher returns per unit of risk than points on the domestic frontier.
All values are expressed in U.S. dollars. Diversification does not eliminate the risk of experiencing investment losses. Risk and return are measured by standard deviation and arithmetic mean return, respectively. Standard deviation measures the fluctuation of returns around the arithmetic average return of the investment. The higher the standard deviation, the greater the variability (and thus risk) of the investment returns. The portfolios presented in this image are based on modern portfolio theory. Government bonds are guaranteed by the full faith and credit of the United States government as to the timely payment of principal and interest. Stocks are not guaranteed and have been more volatile than bonds. International investments involve special risks such as fluctuations in currency, foreign taxation, economic and political risks, and differences in accounting and financial standards. The data assumes reinvestment of all income and does not account for taxes or transaction costs.
Source: U.S. Bonds—20-year U.S. Government Bond; U.S. Stocks—Standard & Poor’s 500®, which is an unmanaged group of securities and considered to be representative of the stock market in general; Canadian Stocks—Morgan Stanley Capital International Canada Index; European except U.K. Stocks—Morgan Stanley Capital International Europe except U.K. Index; U.K. Stocks—Morgan Stanley Capital International U.K. Index; Japanese Stocks—Morgan Stanley Capital International Japan Index; Pacific except Japan Stocks—Morgan Stanley Capital International Pacific except Japan Index. ?