ABSTRACT
Investors are now aware of the opportunities available through international investing. Between 1992 and 1997, it is estimated that investors increased international investment exposure from 5 percent of equities to 10 percent. The driving forces in globalizing portfolios have been the prospect of higher returns and the benefit of diversification. These arguments remain powerful, but there is an added opportunity for international investors: the diversification of investment styles, particularly by adding exposure to smaller capitalization stocks. The definition of investment styles has been a significant result of the developing maturity of institutional investing in the United States over the past 25 years. As a result of this maturing, several benefits have emerged, including improved diversification and improved measurement of investment managers' results. Now, after establishing initial positions in international investments over the last decade, U.S. institutional investors are beginning to pay increasing attention to distinctions in international investment styles.
