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Country biases in equity portfolios are less pronounced and less irrational than one might think


SUREF - The European Money and Finance Forum



Publishing details

SUREF - The European Money and Finance Forum 2022

Authors / Editors

Boermans M;Cooper I;Sercu P;Vanpee R


Publication Year



We use the European Central Bank’s new database of European equity holdings by households to investigate the international structure of portfolios, including both investments via funds and direct holdings of individual equities. Home bias is smaller than usually believed. For the direct portfolios, the Cremers and Petajisto (2009) ActiveShare measure comes with larger investments in the destination country and better returns, while the fraction of the country sub-portfolio invested via funds has no effect on either returns or the size of the overall. This fits the hypothesis of informational advantages rather than a (behavioral) familiarity bias.


International portfolio choice; Home bias; Foreign bias; Informational advantage; Familiarity; Behavioral economics; Active share

Publication Notes

SUERF Policy Brief, No 423

Available on ECCH


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