PT  - JOURNAL ARTICLE
AU  - Donald R. Chambers
AU  - John S. Zdanowicz
ED  - Goyal, Gauri
TI  - Practical Applications of The Limitations of Diversification Return
AID  - 10.3905/pa.2014.2.2.076
DP  - 2014 Oct 31
TA  - Practical Applications
PG  - 1--5
VI  - 2
IP  - 2
4099  - https://pm-research.com/content/2/2/1.11.short
4100  - https://pm-research.com/content/2/2/1.11.full
AB  - The Limitations of Diversification Return Donald R Chambers John S Zdanowicz There is no doubt rebalancing can increase portfolio value, but the drivers of this value are widely misunderstood, according to the research behind The Limitations of Diversification Return , in the Summer 2014 issue of The Journal of Portfolio Management .The value of rebalancing does not come from reduced volatility or increased diversification, as some prior research maintains, co-authors Don Chambers and John Zdanowicz explain. In this Practical Applications report, Chambers-the Walter E. Hanson KPMG Chair in Finance at Lafayette College , tells us why rebalancing increases portfolio value.Don’t bother with diversification return; rethink your view of portfolio rebalancing; mean reversion is the driver. These are the practical applications he discusses in this report.TOPICS: Equity portfolio management, volatility measures, statistical methods