Demirci, Irem. <br/><br/>
How Global is Your Mutual Fund? International Diversification from Multinationals / 
Irem Demirci, Miguel A. Ferreira, Pedro Matos, Clemens Sialm. 
 - Cambridge, Mass.  National Bureau of Economic Research  2020. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w27648 .
 - Working Paper Series (National Bureau of Economic Research)  no. w27648. .
<br/><br/> August 2020. 
<br/><br/> We show that mutual funds worldwide provide substantial international exposure through their domestic holdings of multinationals. An average domestic fund's international exposure increases by 32 percentage points when we consider international corporate diversification. We find that funds with higher indirect international exposure perform better in both the cross section and the time series. This outperformance is more pronounced among small fund families, and funds that invest in small stocks, growth stocks, and less developed capital markets. Our findings support the hypothesis that international diversification from multinationals reduces the transaction and information costs of investing abroad and captures fund manager skill. 
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