This paper presents new stylized facts on the distribution of the home bias at the fund level. We find (i) a large heterogeneity in the degree of home bias across mutual funds; (ii) a positive correlation between the size of funds and home bias; and (iii) a positive correlation between the size of funds, the number of foreign countries and the number of sectors in which they invest. These facts constitute a challenge for existing theories.
We are grateful to Gita Gopinath, Philip Lane and Rich Levich for comments. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Harald Hau & Helene Rey, 2008. " Home Bias at the Fund Level, " American Economic Review, American Economic Association, vol. 98(2), pages 333-38, May. citation courtesy of