European Investing and EMU

Abstract

This article examines the evidence on market integration and its implications for pan-European asset allocation - looking at evidence of declining country barriers, and the relative merits of pan-European industries as asset classes. At the same time, investors are reconsidering the merits of international diversification and global equity allocation. The authors' findings indicate that European industries are becoming less correlated than countries on average, and offer as much, if not more, opportunity in terms of incremental performance.