How much international exposure is advantageous in a domestic portfolio from a Canadian perspective?

In a wave of globalization that has overtaken the world in the last decade; many investors are now adding international exposure to their domestic portfolios, but how much International exposure is advantageous? Extensive academic research has been completed on this question. Almost all papers have tackled this problem from a U.S. domestic perspective; the focus in this paper is on how much international exposure is advantageous for a Canadian domestic investor. Drawing upon the work of Roger G. Clarke and R. Matthew Tullis - How Much International Exposure is Advantageous in a (U.S.) Domestic Portfolio?, we adopt their set-up and variable definitions to develop optimal investment policy for varying levels of investor risk-aversion. We found that using either historical data or reasonable forward looking assumptions about risk and return, Canadian investors have a good opportunity to increase their returns, while minimizing the overall risk of their portfolios.