Where Can Investors Find Geographic Diversification Today?

Bridgewater

Karen Karniol-Tambour, Alexa Rozario

Research

9 Pages

Bridgewater highlights that global market diversification is increasingly valuable amid rising geopolitical and economic divergence. They identify select regions—especially Asia and major emerging markets—as offering meaningful diversification benefits compared to U.S.-centric portfolios.

Key Takeaways

Diversification is essential: With globalization waning, correlations across markets are falling; country-specific shocks have shown the risks of concentrated exposure
Asia offers real benefit: Japan, India, and Brazil stand out for their low correlation to U.S. conditions and provide robust diversification potential
Not all non-U.S. equals: Many developed-market regions like Europe and Canada remain highly correlated with the U.S., offering limited diversification upside
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