@article {Chambers1, author = {Donald R. Chambers and John S. Zdanowicz}, editor = {Goyal, Gauri}, title = {Practical Applications of The Limitations of Diversification Return}, volume = {2}, number = {2}, pages = {1--5}, year = {2014}, doi = {10.3905/pa.2014.2.2.076}, publisher = {Institutional Investor Journals Umbrella}, abstract = {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{\textquoteright}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}, issn = {2329-0196}, URL = {https://pa.pm-research.com/content/2/2/1.11}, eprint = {https://pa.pm-research.com/content/2/2/1.11.full.pdf}, journal = {Practical Applications} }