%0 Journal Article %A Javier Rodríguez %T Return Orthogonality and True Diversification Benefits of BRIC Securities %D 2019 %R 10.3905/jii.2019.10.1.075 %J The Journal of Index Investing %P 75-79 %V 10 %N 1 %X In this study, the author examines and compares the US market risk exposure and true diversification benefits of emerging markets closed-end funds and exchange-traded funds. The author uses a two-factor econometric model and orthogonal returns to isolate both, US direct market risk and true diversification. Results show that exchange-traded funds that invest in emerging markets are a better vehicle for US-based investors to gain international diversification. In comparison to closed-end funds, exchange-traded funds provide truer international diversification and have less exposure to US market risk.TOPICS: Mutual fund performance, exchange-traded funds and applications %U https://jii.pm-research.com/content/iijindinv/10/1/75.full.pdf