(Bloomberg Opinion) — Most investors don’t typically get the opportunity to emulate the strategies of the world’s biggest asset managers. The recent announcement that the Norwegian sovereign wealth fund, the world’s biggest with $1.1 trillion, wants to increase its allocation to North American stocks should be a wake-up call for equity holders who ignore overseas shares — with investors from one nation in particular needing to pay attention.
The tendency for investors to allocate too much of their capital in their home markets is called domestic bias and is a well-known phenomenon. For U.K. investors who’ve stuck with indigenous equities in recent years, this proclivity has cost them dearly.
The U.K. investment industry manages about 8.5 trillion pounds ($11 trillion), more than three-quarters of which is on behalf of local customers, according to figures compiled by the Investment Association, a trade body. For the past five years, the