Finance and Financial Management Commons^™

International Diversification Into Emerging Equity Markets: Perspective Of U.S. Investors, Ki C. Han, Sukhun Lee, David Y. Suk, Hyun Mo Sung

School of Business: Faculty Publications and Other Works

In this study, we examine whether investing in emerging markets is indeed beneficial to U. S. investors. The results we find in this study are not so encouraging for U. S. investors. First, the change in currency exchange rate weakens the benefit of overseas investment to U. S. investors. Second, the correlations between the U. S. market and the emerging markets have been steadily rising during the sample period. Third, most of these emerging equity markets scored lower Sharpe Ratios than the U. S. equity market. Fourth, we find that the emerging market and its currency market move in the …