RT Journal Article
SR Electronic
T1 EMU and the Asset Allocation Decision
JF The Journal of Investing
FD Institutional Investor Journals
SP 39
OP 46
DO 10.3905/joi.1999.319409
VO 8
IS 2
A1 Kevin Coldiron
A1 Kenneth F. Kroner
YR 1999
UL https://pm-research.com/content/8/2/39.abstract
AB The EMU countries now share one central bank, one monetary policy, one short-term interest rate and one currency. This structural change has led to many proposed new opportunities to add value in Global Asset Allocation. We investigate many of these proposals, and conclude that most - but not all - are without merit. For example, we conclude that the sudden move from country-based models towards sector-based models is premature, as country factors are likely to increase in importance for the next few years. Sector factors will eventually dominate, but not until Euroland business cycles are synchronized. So the best opportunity to exploit EMU is to allocate across countries in the intermediate term, while preparing to allocate across sectors in the long run.