The Big Theme 

Thematic investing can improve portfolio diversity

Thematic investing can improve portfolio diversity

Correlations between the US, UK, Europe, Japan, Asia Pacific and emerging market equity markets have been relatively low over the past two years. However, in times of extreme stress the world's major equity markets can all fall together. For example, a correlation of 1 means markets rise and fall perfectly in tandem, and between 2007 and 2010 the correlations between major equity markets, with the exception of Japan, ranged between 0.77 and 0.99.

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