PT  - JOURNAL ARTICLE
AU  - Javier Rodríguez
TI  - Return Orthogonality and True Diversification Benefits of BRIC Securities
AID  - 10.3905/jii.2019.10.1.075
DP  - 2019 May 31
TA  - The Journal of Index Investing
PG  - 75--79
VI  - 10
IP  - 1
4099  - https://pm-research.com/content/10/1/75.short
4100  - https://pm-research.com/content/10/1/75.full
AB  - In this study, the author examines and compares the US market risk exposure and true diversification benefits of emerging markets closed-end funds and exchange-traded funds. The author uses a two-factor econometric model and orthogonal returns to isolate both, US direct market risk and true diversification. Results show that exchange-traded funds that invest in emerging markets are a better vehicle for US-based investors to gain international diversification. In comparison to closed-end funds, exchange-traded funds provide truer international diversification and have less exposure to US market risk.TOPICS: Mutual fund performance, exchange-traded funds and applications