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In the past few years with the growth in financial service industry, investors have been offered with a plethora of products and services. There have been multiple avenues for the investors for parking their funds depending on their risk profile and return expectations (Malkiel 2003).The different investment avenues offer investors with an option to invest in specific or diversified assets. These assets can range from financial assets like stocks, bonds, commodities, foreign exchange to real sector assets like infrastructure, real estate and manufacturing.Over the past few years, the large financial institutions, high net worth investors and even retail investors have had the choice to outsource their investment decision to some one who specializes in the field on investment and has much more resources and market information than these entities. This helps these "managers" in getting better returns than a normal individual in the market. These "managers" in return charge a particular fee in lieu of their services; this fee depends on things like regulatory conditions, type of competence required for the investment and historical performance of the manager.Read more: http://www.ukessays.co.uk/essays/finance/growth-of-hedge-funds.php#ixzz3YGOKxoAmDiversified international investment offers investors higher expected returns and/ or reducedrisks vis-à-vis exclusively domestic investment. Here we will discuss the sources and sizes ofthese gains from venturing overseas for portfolio investment, which is investment in equitibonds where the investor’s holding is too small to provide any effective control. The Advantages of International Portfolio Diversification1. Spreading risk: Correlations between national asset marketsBecause of risk aversion, investors demand higher expected returns for taking on investmentswith greater risk. It is a well-established proposition in portfolio theory that whenever there isimperfect co-relation between different assets’ returns, risk is reduced by maintaining only aportion of wealth in any individual asset. More generally, by selecting a portfolio according toexpected returns, variances of returns, and co-relations between returns, an investor can achieveminimum risk for a given expected portfolio return, or maximum expected portfolio return for agiven risk. Furthermore, ceteris paribus, the lower are the co-relations between returns ondifferent assets, the greater are the benefits of portfolio diversification.International Journal of Marketing, Financial Services & Management Research________________________ ISSN 2277- 3622Vol.2, No. 4, April (2013)Online available at www.indianresearchjournals.com19Because of different industrial structure in different countries, and because different economiesdo not trace out exactly the same business cycle, there are reasons for smaller co-relations ofexpected returns between investments in numerous different countries than between investmentswithin any one country. This means that foreign investments offer diversification benefits thatcannot be enjoyed by investing only at home, and for example, that a US investor might includeBritish stocks in a portfolio even if they offer lower expected returns than US stocks; the benefitof risk reduction might more than compensate for lower expected reการกระจายการลงทุนระหว่างประเทศ การกระจายการลงทุนระหว่างประเทศ สามารถช่วยให้นักลงทุนซึ่งมีความคาดหวังในด้านผลตอบแทนสูงได้รับผลประโยชน์ ดังนี้ 1)ช่วยในการกระจายความเสี่ยงในการลงทุน เนื่องจาก
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