PT - JOURNAL ARTICLE AU - Paul Crowley TI - International Diversification for U.K. Investors AID - 10.3905/joi.1999.319404 DP - 1999 May 31 TA - The Journal of Investing PG - 47--57 VI - 8 IP - 2 4099 - https://pm-research.com/content/8/2/47.short 4100 - https://pm-research.com/content/8/2/47.full AB - Orthodox finance theory tells us that the market portfolio is efficient. In the absence of unique views, the investor does best to hold the market portfolio. In recent years, however, U.K. investors have seen their local market outperform a diversified world portfolio, with about the same degree of risk. This has been possible because the risk-reducing effects of diversification have been more than offset by the relatively low risk of the U.K. market itself. The author identifies and backtests an investment strategy that enables investors to outperform the world portfolio by systematically buying a considerably less-diversified portfolio. A minimum-variance portfolio - which effectively assumes that expected returns to all markets are equal - would have outperformed the world portfolio from the GBP perspective.