Individuals Countries Boost Diversification

Individual country equity performance varies, with some markets outperforming regional benchmarks every year, says Kathleen Dobyns, manager, product management, equity index product, data and analytics, at FTSE Russell. This means, she said at Franklin Templeton’s ‘Generating Opportunities with Single Country ETFs’ session that adding country level exposures can boost portfolio diversification. However, country valuations can vary, allowing value conscious investors to overweight cheaper markets. As well, individual country equity dividend yields vary widely which allows income-oriented investors to increase dividend income. Still, while market cap weighted regional indexes can skew toward larger markets, investors can express positive views on smaller markets through single country exposure, she said.

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