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Financials Haven’t Added to Return in Asia over the past 10 Years

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Financials Haven’t Added to #Return in #Asia over the past 10 Years

 

  • In this study, we separated financial companies from non-financial companies in Asia ex Japan
  • Return has been pretty much the same
  • Volatility was slightly higher for Financials, and it was highly correlated
  • We usually don’t include Financials in our various stock portfolios
  • A few reasons are because Financials: require macroeconomic research, are often used as market exposure stocks, are government regulated, and are commodity businesses (one is unlikely to grow profits massively relative to peers)
  • We don’t increase complexity if it doesn’t enhance performance

 

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