Home bias occurs when investors favour domestic assets, such as shares or bonds issued by companies in their own country.
Common drivers include:
A similar bias, known as "local bias", occurs when investors favour companies that are geographically close to where they live.
Despite decades of financial globalisation, investors remain heavily exposed to equities in their domestic markets. For example, foreign equities account for only 22% of US investors' portfolios and 39% of British investors' portfolios.1
In France, investors allocate nearly 75% of their equity portfolios to domestic stocks, even though French market capitalisation represents only 4.2% of the global market.2
Avoiding international markets can make your portfolio more volatile and miss growth opportunities:
Missing out on potential global growth opportunities
Investors may risk missing the potential gains available in international markets.
Becoming aware of home bias is an essential step in optimising the diversification* of your portfolio and limiting the risks associated with excessive concentration of securities on the domestic market.
Key questions to ask yourself:
Broaden your exposure: investment funds and ETFs (Exchange Traded Funds) provide simple access to different regions or sectors, but you can also invest directly in international stocks to capture global growth potential.
Rely on the expertise of the investment managers. Their role is to identify opportunities and manage risks, allowing you to access foreign markets without any extra effort.
Illustrations : Cléo Wehrlin
*Diversification does not guarantee a profit or protect against a loss
1. Figure calculated based on 2010 data. Cooper, Ian, Piet Sercu, and Rosanne Vanpée. "The equity home bias puzzle: A survey." Foundations and Trends” in Finance.
Cooper, Ian, Piet Sercu, and Rosanne Vanpée. "The equity home bias puzzle: A survey." Foundations and Trends® in Finance 7.4 (2013): 289-416.
2. Figure calculated based on data for the period 2001–2003. Fidora, Michael, Marcel Fratzscher, and Christian Thimann. "Home bias in global bond and equity markets: the role of real exchange rate volatility." Journal of International Money and Finance.
3. Bekaert, Geert, and Robert J. Hodrick. International financial management. Vol. 2. Pearson, 2012
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 16 April 2026. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 16 April 2026
Doc ID: 5064796