Equities remain an important component in investor portfolios. An increasing number of investors have recognized that the healthiest equity portfolios are well-diversified not only by investment style and market capitalization, but also by geography. However, most Canadian investors still exhibit a "home-country bias" : a tendency to favour investments in domestic companies and securities.
In a new publication, Investment Insight, Segal Rogerscasey Canada explains why that bias creates a long-term disadvantage in an investment portfolio and makes the case that global equities are a way to avoid that disadvantage.
In Segal Rogerscasey Canada's experience, implementing a global equity structure need not be overly disruptive. It is not necessary to replace all Canadian and non-Canadian equity managers within a portfolio because a number of money managers have begun to expand their offerings to include global equities. In some cases, expanding investment guidelines might be a simple solution. In other situations, it might make sense to maintain Canadian and non-Canadian managers and look to add global mandates selectively as opportunities arise.