GAINS FROM INTERNATIONAL DIVERSIFICATION AND DOMESTIC PORTFOLIO IN EMERGING STOCKS MARKETS: PHILIPPINE AND INDONESIAN PERSPECTIVES

Eduardus Tandelilin

Eduardus Tandelilin Faculty of Economics, Universitas Gadjah Mada

Keywords: characteristics, multinational, performance, U.S.

Abstract

The study was organized into two major concerns: first, identifying the gains from international diversification in emerging stock markets from the Philippine and the Indonesian perspectives and determining which perspective yields the greater gains; and second, determining how many securities must be included to obtain an optimal investment portfolio from the Philippine and Indonesia perspectives.
The empirical results indicate that there are gains from international diversification, both from the Philippine and Indonesian perspectives, in two to eight emerging stock markets. Generally the gains are greater from the Indonesian perspective than the Philippine perspective in all country
combinations.
Further, this study found that the number of stocks needed to form an optimum domestic investment portfolio was bigger for the Indonesian investor‘s perspective (at 15 stocks) than for the Filipino investor (14).

Author Biography

Eduardus Tandelilin, Faculty of Economics, Universitas Gadjah Mada

He earned his Ph.D. (1998) from the College of Business Administration, University of the Philippines, Diliman. His Research interest is in the capital market, international diversification, and investment portfolio. He teaches at the Faculty of Economics and Master of Management, Gadjah Mada University.

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