- 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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