Where Are Your Diversification Benefits?

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Published in Barclays Global Investors’ practitioner series Investment Currents, this piece examines when international diversification actually delivers on its theoretical promise — and when it does not. Scanlan interrogates the conditions under which correlations across international equity markets rise, eroding the diversification benefit that investors are counting on precisely when they need it most.

The article was an early practitioner contribution to a debate that would intensify following the 1998 emerging markets crises and again after 2008, when the failure of international diversification during global drawdowns became a central topic in institutional portfolio construction.