Home Bias in Investments
16 May 2014
by Prof Bruno Solnik with CFA Singapore
This finance seminar on “Home Bias in Investments” held in Singapore is part of the program’s outreach to Asian cities. The speaker, Prof Bruno Solnik, is the Academic Director at HKUST for the program. Prof Solnik’s research interest focuses on portfolio management and asset allocation. His expertise has been called upon by many pension funds and foundations including Royal Dutch/Shell and Calster, and the Nobel Foundation. Prof Solnik has also sat on investment and advisory committee for UBS Global Asset Management and Zurich Insurance Group.
Portfolios tend to be biased towards home investments. In a perfect world, the benchmark would be the world market portfolio, but investors have portfolios overly concentrated in domestic investments. In this seminar, Prof Solnik reviewed recent statistics on home bias for equity and bonds, and discussed various explanations such as measurement issues, explicit costs, regulations and barriers, information asymmetries and behavioral explanations. He concluded by discussing some recent results from his own research.
Prof Solnik illustrated the topics lively with real-life examples. More than 50 participants joined the seminar and exchanged ideas as well as gained insights through the Q&A session.