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Global Asset Allocation and Stock Selection. Global Asset Allocation: The Case For International Investment. Campbell R. Harvey Duke University, Durham, NC USA National Bureau of Economic Research, Cambridge MA USA [email protected] +1 919.660.7768 office || +1 919.271.8156 mobile - PowerPoint PPT Presentation
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1
Global Asset Allocation:Global Asset Allocation:The Case For International InvestmentThe Case For International Investment
Global Asset Allocation and Stock Selection
Campbell R. HarveyDuke University, Durham, NC USA
National Bureau of Economic Research, Cambridge MA USA
[email protected]+1 919.660.7768 office || +1 919.271.8156 mobile
http://www.duke.edu/~charvey
2
The PlanThe Plan
• International track record• Returns and diversification• Long horizon vs. short horizon• What can we expect from U.S. equities?• What to expect from international?• Alternative views: dynamic strategies, hedge funds• Research frontier – changing views of diversification• Importance of GPR
3
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
0% 5% 10% 15% 20% 25%
Volatility(May 1986 to June 2002)
Ret
urn
(May
198
6 to
Jun
e 20
02)
One Year Treasury STRIP
Two Year STRIP
Five Year Treasury STRIP
Seven Year Treasury STRIP
Ten Year Treasury STRIP
Twenty Year Treasury STRIPThirty Year Treasury STRIP
MBS Credit
AggregateGovernment
Three Year Treasury STRIP
Wilshire Small Cap
Wilshire 5000Wilshire Large Cap
Wilshire Mid Cap
EAFE X-Japan
U.S. Investments Versus Non-U.S. Equities
The International Track RecordThe International Track Record
Source: Erb and Harvey (2004)
EAFE
4
-30
-20
-10
0
10
20
30
Australi
a
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
France
Germ
any
Hong K
ong
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portu
gal Sp
ain
Swed
en
Switz
erlan
d UK US
World
World ex
-US EAFE
Expansion geometric mean Recession geometric mean
Average Annual Returns During U.S. Business Cycle Phases
Returns and DiversificationReturns and Diversification
Data from MSCI
5
Returns and DiversificationReturns and Diversification
-30
-20
-10
0
10
20
30
Argentin
a
Bahrai
n
Brazil
Chile
China
Colombia
Czech
Republic
Egypt
Greece
Hungary
India
Indonesia
Israe
l
Jordan
Korea
Mala
ysia
Mexico
Morocc
o
Nigeria
Oman
Pakist
an
Peru
Phili
ppines
Poland
Russia
Saudi A
rabia
Slovak
ia
South A
frica
Sri Lan
ka
Taiwan
Thailan
d
Turkey
Venez
uela
Zimbab
we
Composite
Expansion geometric mean Recession geometric mean
Average Returns During U.S. Business Cycle Phases
AnnualReturnU.S. $
Data from IFC
6
Returns and DiversificationReturns and Diversification
0
10
20
30
40
50
60
Australi
a
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
France
Germ
any
Hong K
ong
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portugal
Spain
Swed
en
Switz
erlan
d UK US
World
World ex
-US EAFE
Expansion std.dev. Recession std.dev.
Average Annual Volatility During U.S. Business Cycle Phases
Data from MSCI
7
Returns and DiversificationReturns and Diversification
-0.2
0
0.2
0.4
0.6
0.8
1
Australi
a
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
France
Germ
any
Hon
g Kong
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portu
gal Sp
ain
Swed
en
Switz
erlan
d UK US
World
World ex
-US EAFE
Expansion correlation with US Recession correlation with US
Correlations During U.S. Business Cycle Phases
Data from MSCI
8
Returns and DiversificationReturns and Diversification
0
5
10
15
20
25
30
35
40
45
Australi
a
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
France
Germ
any
Hon
g Kon
g
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portu
gal Sp
ain
Swed
en
Switz
erlan
d UK US
World
World ex
-US EAFE
Expansion covariance with US Recession covariance with US
Covariances During U.S. Business Cycle Phases
Data from MSCI
9
Returns and DiversificationReturns and Diversification
-60
-40
-20
0
20
40
60
Austra
lia
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
France
Germ
any
Hon
g Kong
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portu
gal Sp
ain
Swed
en
Switz
erlan
d UK US
World
World e
x-US EAFE
US+ geometric mean US- geometric mean
Average Returns During U.S. Up and Down Markets
Data from MSCI
10
Returns and DiversificationReturns and Diversification
-60
-40
-20
0
20
40
60
Argentin
a
Bahrai
n
Brazil
Chile
China
Colombia
Czech
Rep
ublicEgyp
t
Greece
Hungary
India
Indonesia
Israe
l
Jordan
Korea
Mala
ysia
Mex
ico
Morocc
o
Nigeria
Oman
Pakist
an
Peru
Phili
ppines
Polan
d
Russia
Saudi A
rabia
Slovak
ia
South A
frica
Sri Lan
ka
Taiw
an
Thailan
d
Turkey
Venez
uela
Zimbab
we
Composit
e
US+ geometric mean US- geometric mean
Average Returns During U.S. Up and Down Markets
AnnualReturnU.S. $
Data from IFC
11
Returns and DiversificationReturns and Diversification
Data from MSCI
-0.2
0
0.2
0.4
0.6
0.8
1
Australi
a
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
Franc
e
Germ
any
Hong
Kong
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portu
gal Sp
ain
Swed
en
Switz
erlan
d UK US
World
World ex
-US EAFE
Correlation with US when US+ Correlation with US when US-
Correlations with U.S. Conditional on U.S. Returns
12
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Argentin
a
Bahrai
n
Brazil
Chile
China
Colombia
Czech
Rep
ublicEgypt
Greece
Hungary
India
Indonesia
Israe
l
Jordan
Korea
Mala
ysia
Mex
ico
Moro
cco
Nigeria
Oman
Pakist
an
Peru
Phili
ppines
Poland
Russia
Saudi A
rabia
Slovak
ia
South A
frica
Sri Lan
ka
Taiwan
Thailan
d
Turkey
Venez
uela
Zimbab
we
Composit
e
Correlation with US when US+ Correlation with US when US-
Correlations with U.S. Conditional on U.S. Returns
Returns and DiversificationReturns and Diversification
Data from IFC
13
Returns and DiversificationReturns and Diversification
Evolution of Correlation with U.S.
0
0.2
0.4
0.6
0.8
1
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Corr(WorldXUS, US) Corr(IFC,US)
Data from IFC and MSCI
14
The Long HorizonThe Long Horizon
100 Years of Real Equity Returns
0
1
2
3
4
5
6
7
8
9
Australi
a
Belgium
Canad
a
Denmark
France
German
Irelan
d Ita
ly
Japan
Netherl
ands
South Afri
ca
Spain
Sweden
UK
U.S.
World
World X
-US
Data from Dimson, Marsh and Stauton (2002)
15
The Long HorizonThe Long Horizon
100 Years of Real Equity Returns
-5
0
5
10
15
20
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
U.S. equity World X-US equity
Data from Dimson, Marsh and Stauton (2002)
16
The Long HorizonThe Long Horizon
100 Years of Real Bond Returns
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
3
Australi
a
Beligum
Canad
a
Denmark
France
German
Irelan
d Ita
ly
Japan
Netherl
ands
South A
frica
Sp
ain
Swed
en
UK U.S.
World
World X
-US
Data from Dimson, Marsh and Stauton (2002)
17
The Long HorizonThe Long Horizon
100 Years of Real Bond Returns
-10
-5
0
5
10
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
U.S. World X-US
Data from Dimson, Marsh and Stauton (2002)
18
What to ExpectWhat to Expect
Dividend Yields Correlated With Future Returns
012345678
Div
iden
d Y
ield
1900 Yield 2000 Yield
Data from Dimson, Marsh and Stauton (2002)
19
What to ExpectWhat to Expect
Price to Trailing Peak Earnings Vs 5 Year Average CPI(overlapping annual data)
Pric
e to
Tra
iling
Pea
k E
arni
ngs
Source: Bloomberg, Standard & Poor’s
0
5
10
15
20
25
30
35
-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
.
1996-2001
5 yr Average CPI
(1920- August 2002)
Current environment:Inflation: 2.3%P/E: 17.0x
Source: Goldman Sachs (2002)
20
What to ExpectWhat to Expect
• Ten-year risk premium around 3.5% and stable whereas one-year risk premium quite variable
012345678
6-Jun-00 7-Sep-00 4-Dec-00 12-Mar-01 7-Jun-0110-Sep-01 4-Dec-01 11-Mar-02 4-Jun-02 16-Sep-02Dec-02 Mar-03 Jun-03 Sep-03 Dec-03Mar-04 Jun-04 Sep-04 Dec-04
012345678
6-Jun-00 7-Sep-00 4-Dec-00 12-Mar-01 7-Jun-0110-Sep-01 4-Dec-01 11-Mar-02 4-Jun-02 16-Sep-02Dec-02 Mar-03 Jun-03 Sep-03 Dec-03Mar-04 Jun-04 Sep-04 Dec-04
10-year premium 1-year premiumSource: Graham and Harvey (2005)
21
What to ExpectWhat to Expect
y = 0.794x + 0.0791R2 = 0.167
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
-15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00%
Rolling Five Year Long Term Bond Return(June 1932 to June 2002)
Rol
ling
Five
Yea
r S&
P 50
0 R
etur
n
U.S. Equity and Bond Returns are Positively Correlated
Source: Erb and Harvey (2004)
22
What to ExpectWhat to Expect
World Real Equity and Real Bond Returns are Positively Correlated
Source: Erb and Harvey (2004)
y = 0.6783x + 4.815R2 = 0.3984
-30
-20
-10
0
10
20
30
40
-40 -30 -20 -10 0 10 20
Ten Year Real Bond Return
Ten
Yea
r R
eal S
tock
Ret
urn
23
What to ExpectWhat to Expect
Inflation Negatively Related to Real Bill Returns
Source: Erb and Harvey (2004)
y = -0.7078x + 0.0294R2 = 0.5373
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Inflation
T-B
ill R
eal R
etur
n
24
What to ExpectWhat to Expect
Inflation Negatively Related to Real Intermediate Bond Returns
Source: Erb and Harvey (2004)
y = -0.9873x + 0.0545R2 = 0.3639
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Inflation
Inte
rmed
iate
Bon
d R
eal R
etur
n
25
What to ExpectWhat to Expect
Inflation Negatively Related to Real Bond Returns
Source: Erb and Harvey (2004)
y = -1.3027x + 0.0664R2 = 0.2767
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Inflation
Lon
g B
ond
Rea
l Ret
urn
26
What to ExpectWhat to Expect
Inflation Negatively Related to Real Equity Returns
Source: Erb and Harvey (2004)
y = -1.1054x + 0.1299R2 = 0.0546
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Inflation
S&P
Rea
l Ret
urn
27
What to ExpectWhat to Expect
Inflation Negatively Related to Real International Bill Returns
Source: Erb and Harvey (2004)
y = -0.9226x + 4.7819R2 = 0.8021
-5
-4
-3
-2
-1
0
1
2
3
4
0 1 2 3 4 5 6 7 8 9 10
100 Year Inflation Rate
100
Yea
r R
eal B
ill R
etur
n
28
What to ExpectWhat to Expect
Inflation Negatively Related to Real International Bill Returns
Source: Erb and Harvey (2004)
y = -0.6731x + 3.9725R2 = 0.6097
-3
-2
-1
0
1
2
3
0 1 2 3 4 5 6 7 8 9 10
100 Year Inflation Rate
100
Yea
r R
eal B
ond
Ret
urn
29
What to ExpectWhat to Expect
Inflation Negatively Related to Real International Equity Returns
Source: Erb and Harvey (2004)
y = -0.6333x + 8.3176R2 = 0.4935
0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8 9 10
100 Year Inflation Rate
100
Yea
r R
eal E
quity
Ret
urn
30
What to ExpectWhat to Expect
Inflation Negatively Related to Real International Equity Returns
Source: Erb and Harvey (2004)
y = -0.9226x + 4.7819R2 = 0.8021
y = -0.6731x + 3.9725R2 = 0.6097
y = -0.6333x + 8.3176R2 = 0.4935
-6
-4
-2
0
2
4
6
8
10
0 1 2 3 4 5 6 7 8 9 10
100 Year Inflation Rate
100
Yea
r R
eal R
etur
n
Real Bill Real Bond Real Equity
31
Alternative VehiclesAlternative Vehicles
Alternate Asset Classes Often Involve Implicit or Explicit Options
-4-3-2-101234567
1 2 3 4 5
S&P 500Global Macro
Source: Naik (2002)
32
Alternative VehiclesAlternative Vehicles
Alternate Asset Classes Often Involve Implicit or Explicit Options
-8
-6
-4
-2
0
2
4
6
8
1 2 3 4 5
S&P 500Trend Followers
Source: Naik (2002)
33
Alternative VehiclesAlternative Vehicles
Alternate Asset Classes Often Involve Implicit or Explicit Options
-4-3-2-101234567
1 2 3 4 5
S&P 500FI Arb
Source: Naik (2002)
34
Alternative VehiclesAlternative Vehicles
Alternate Asset Classes Often Involve Implicit or Explicit Options
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
1 2 3 4 5
Delta(BAA-10yTBond)x10FI Arb
Source: Naik (2002)
35
Alternative VehiclesAlternative Vehicles
Alternate Asset Classes Often Involve Implicit or Explicit OptionsPanel B: PRAM Returns, 1990 - 1998
Ris
k A
rb R
etur
n - R
isk-
free
Rat
e
Market Return minus Risk-free Rate
-.2 -.16 -.12 -.08 -.04 0 .04 .08 .12 .16 .2
-.1
-.08
-.06
-.04
-.02
0
.02
.04
.06
.08
.1
9808
90089001
9009
9607
9703
9106
9403
9111
9411
9708
97109004
94069805
9304
98079203
9402920892069409
93119010
9007
961295109109
9606900692019702930791049309
98019306
93029205
95089405
98049404960394129210
9002
9209
96109301951292029204
9410
9602
9110
9712
9212
9310
9501
9312
9003
9604
9504
91089503
96059303
901296019103950697119305
9407
96089505
9401980695099502
91059507
93089207
9211
9704
95119408
970691079101
9803
97019609
9709
9811
9812
9809
9011
961197059802
981091029707
9005 9112
Source: Figure 5 from Mitchell & Pulvino (2000)
36
Alternative VehiclesAlternative Vehicles
Alternate Asset Classes Often Involve Implicit or Explicit Options
-8
-6
-4
-2
0
2
4
6
-15 -10 -5 0 5 10
Russell 3000 Index Returns
Eve
nt D
riven
Inde
x R
etur
ns
LOWESS fit
Source: Naik (2002)
37
Rethinking RiskRethinking Risk
• Traditional models maximize expected returns for some level of volatility
• Is volatility a complete measure of risk?
38
Rethinking RiskRethinking Risk
• Much interest in downside risk, asymmetric volatility, semi-variance, extreme value analysis, regime-switching, jump processes, ...
39
Rethinking RiskRethinking Risk
• ... These are just terms that describe the skewness in returns distributions.
• Most asset allocation work operates in two dimensions: mean and variance -- but skew is important for investors.
• Examples:
40
Rethinking RiskRethinking Risk
1. The $1 lottery ticket. The expected value is $0.45 (hence a -55%) expected return.– Why is price so high? – Lottery delivers positive skew, people like
positive skew and are willing to pay a premium
41
Rethinking RiskRethinking Risk
2. High implied vol in out of the money OEX put options.– Why is price so high? – Option limits downside (reduces negative
skew).– Investors are willing to pay a premium for
assets that reduce negative skew
42
Rethinking RiskRethinking Risk
3. Some stocks that trade with seemingly “too high” P/E multiples– Why is price so high? – Enormous upside potential (some of which is
not well understood)– Investors are willing to pay a premium for
assets that produce positive skew– [Note: Expected returns could be small or
negative!]
43
Rethinking RiskRethinking Risk
0
5
10
15
Variance
- 2
- 1
0
1
2
Skewness
57.510
12.5Expected Return
0
5
10
15
Variance
Source: Harvey and Siddique (2000)
44
Rethinking RiskRethinking Risk
-2
-1.5
-1
-0.5
0
0.5
1
Australi
a
Austria
Belg
ium
Canad
a
Den
mark
Finlan
d
Franc
e
Germ
any
Hong
Kong
Irelan
d Ita
ly
Japan
Netherl
ands
New
Zealan
d
Norway
Portu
gal Sp
ain
Swed
en
Switz
erlan
d UK US
World
World ex
-US
EAFE
Average Skewness in Developed Markets
Data from MSCI
45
Rethinking RiskRethinking Risk
-2
-1.5
-1
-0.5
0
0.5
1
Argenti
na
Bahrai
n
Brazil
Chile
China
Colombia
Czech R
epub
licEgy
pt
Greece
Hungar
y
India
Indon
esia
Israel
Jordan
Korea
Malaysi
a
Mexico
Morocco
Nigeria
Oman
Pakista
n
Peru
Philipp
ines
Poland
Russia
Saudi A
rabia
Slovak
ia
South A
frica
Sri Lank
a
Taiwan
Thailan
d
Turkey
Venezu
ela
Zimbab
we
Compo
site
Average Skewness in Emerging Markets
Data from IFC
46
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment
• The U.S. has become much more risky– High sensitivity to some GPRs– Disagreement on strength of economy– Financial information less credible
• These factors suggest shifting exposures from equity to safer fixed income
47
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment ICRG Political Risk
Data from PRS
60
65
70
75
80
85
90
95
100
Jan-01
Feb-01
Mar-01
Apr-01
May-01Jun
-01Jul
-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01Jan
-02
Feb-02
Mar-02
Apr-02
May-02Jun
-02Jul
-02
Aug-02
Sep-02
Oct-02
Nov-02
Dec-02Jan
-03
Equally-weighted world G-7xUS Switzerland United States
48
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment ICRG Political Risk
Data from PRS
60
65
70
75
80
85
90
95
100
Jan-01
Feb-01
Mar-01
Apr-01
May-01Jun
-01Jul
-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01Jan
-02
Feb-02
Mar-02
Apr-02
May-02Jun
-02Jul
-02
Aug-02
Sep-02
Oct-02
Nov-02
Dec-02Jan
-03
Equally-weighted world Japan Switzerland United States
49
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment ICRG Political Risk
Data from PRS
6065707580859095
100
Jan-01
Feb-01
Mar-01
Apr-01
May-01Jun
-01Jul
-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01Jan
-02
Feb-02
Mar-02
Apr-02
May-02Jun
-02Jul
-02
Aug-02
Sep-02
Oct-02
Nov-02
Dec-02Jan
-03
Equally-weighted world JapanGermany SwitzerlandUnited States
50
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment
Risk Ratings December 2002
Data from PRS
Luxembourg 94.5 Netherlands 88.5 Bahamas 84.5Finland 94.0 Singapore 88.5 Spain 83.0Ireland 92.5 Portugal 87.5 Hungary 82.5Switzerland 92.5 Australia 87.0 France 81.0Iceland 92.0 Belgium 87.0 Italy 81.0Sweden 91.5 Japan 87.0 Slovenia 81.0Denmark 91.0 United Kingdom 87.0 Brunei 80.5New Zealand 91.0 Malta 86.5 United States 80.0Austria 90.5 Canada 86.0 Bahrain 79.5Norway 90.0 Germany 86.0 Poland 79.5
51
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment
Risk Ratings May 2001
Netherlands 96.5 Portugal 90.0 Chile 81.0Finland 95.0 Norway 90.0 Slovak Rep. 81.0Luxembourg 95.0 Singapore 89.5 Uruguay 81.0Denmark 93.5 Germany 88.0 Brunei 80.5Iceland 93.0 Japan 88.0 France 80.0Sweden 93.0 Australia 87.0 Qatar 80.0Switzerland 93.0 Belgium 87.0 U.A.E. 80.0United Kingdom 92.5 Malta 87.0 Hong Kong 79.5Canada 91.0 Bahamas 84.5 Poland 79.5Ireland 90.5 Costa Rica 83.5 Botswana 79.0New Zealand 90.5 Italy 83.0 Cyprus 79.0Austria 90.0 Spain 82.0 Czech Rep. 79.0United States 90.0 Slovenia 81.5 Greece 79.0
Data from PRS
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R2 = 0.2976
-10%
0%
10%
20%
30%
40%
50%
0 10 20 30 40 50 60 70 80 90 100
II Rating
Ave
rage
retu
rns
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment
Higher risk means equity investors require a higher rate of return
Risk Ratings from Institutional Investor
53
• Equation implies an increase in the medium-term risk premium of 240bp– This helps explain the recent decline in the
equity market– This helps explain the recent behavior of the
U.S. dollar– This helps explain the slow down in real
investment (hurdle rates are up)
U.S. Has Become a Riskier Global InvestmentU.S. Has Become a Riskier Global Investment
54
• International investment is mainly about returns – diversification, while important, is often “oversold”
• Expected returns depend on fundamental values today – not just historical return performance.
• U.S. risk has increased suggesting a reallocation from equity to fixed income
ConclusionsConclusions
55
• All articles on www.duke.edu/~charvey– The Drivers of Expected Returns in
International Markets (2000)– Global Tactical Asset Allocation (2001) with
Magnus Dahlquist– The Term Structure of Equity Risk Premia
(2004) with Claude Erb
ReadingsReadings