A Post-Modern Portfolio Theory View of Diversification Outside the US Market

摘要

Rex Sinquefeld (1996) has argued that evidence from the 1970-1994 period supports the conclusion that the performance of the US S&P500 and the EAFE indexes in local currency has been virtually the same and that there is little risk reduction available in adding a EAFE protfolio to an S&P500 protfolio. Further. Sinquefeld complains that most EAFE countries subject dividends to withholding taxes which US tax-exempt investors cannot use taxable income to claim against.