Home bias among investors in Canada may be on the decline, according to a recent report from Vanguard Canada, but experts say Canadians are still over-investing at home and not getting the full benefit of portfolio diversification.
The report found that Canadians allocate 50 per cent of their equity exposure to domestic holdings, down from 67 per cent in 2012. However, Canadian stocks make up only around three per cent of the global stock market, meaning an excessive home bias remains.
“If you have an over-allocation, you have more potential for volatility in the portfolio,” Ashish Dewan, portfolio consultant at Vanguard Canada and author of the report, said in an interview with Yahoo Finance Canada.
The Canadian stock market is heavily concentrated in…
