GLOBAL PORTFOLIO DIVERSIFICATION FOR INDIAN INVESTORS: BALANCING RISKS AND OPPORTUNITIES IN INTERNATIONAL EQUITIES

DOI: https://doie.org/10.65985/APER.2026808194

Authors:

Prof. Manoj M Bagesar

Keywords:

International diversification, portfolio risk, global equities, Indian investors, currency risk, MSCI indices, home bias.

Abstract:

This teaching case examined the reason for Indian investors to assign some part of their portfolios to global equity market, considering that Indian markets accounted for only approximately 3% of global market capitalization. Taking into consideration MSCI index returns from 2008 to 2025, the case examined cross-market correlations and conducted portfolio simulations to ascertain benefit of Internation diversification. It examined the risk return profiles of a purely domestic equity allocation with those of a mixed strategy consisting 70% domestic and 30% global equities, emphasizing the impact on portfolio efficiency and wealth creation over long term. Practical implications: Investor with the help of systematic investment plans or hedged funds with 10- 30 % allocation to global equities reduced home bias and volatility., although geopolitical events, foreign currency risk and regulatory risks remained. The case was suitable for courses in Portfolio Management, International Finance, or Investment Analysis.

PDF