Macroeconomic Factors and International Industry Returns
This chapter extends the evidence presented in earlier chapters of the book, with respect to macroeconomic factors affecting industry returns, by moving away from the US and into a global setting. Managers who are interested in building global portfolios of stocks operate in such a setting. Evidence at the industry level,1 has shown that firms within the same industry experience similar rates of return. Furthermore, industry average rates of return exhibit significant differences; and this is reflected in the increasing focus of investors towards an industry oriented approach by the existence of sector funds (e.g. transport, construction, banking etc.).
KeywordsStock Return Excess Return Macroeconomic Factor Foreign Exchange Risk International Industry
Unable to display preview. Download preview PDF.