1. What are international markets?

At the heart of international investing lies the idea of diversification. International sharemarkets are those located in a foreign jurisdiction subject to another country’s regulations. They’re a great way for investors to increase the diversity of their portfolios, adding different elements that might not be as available, or as developed, in Australia’s sharemarket. They represent a sizeable opportunity compared to the domestic market.


In short

  • International sharemarket open up the biggest economies and companies
  • Buying international shares is a great way to boost diversification

The total sum of Australia’s local sharemarket is a little over $2 trillion. That’s pretty big—it’s certainly not a global slouch.

However, the combined value of all US-listed sharemarkets tips about US$26 trillion, with the New York Securities Exchange leading the pack, followed by the NASDAQ. The Hong Kong, Tokyo and Shanghai exchanges battle for a distant third, with only about US$6 trillion in total market value each.

That’s a lot of shares when compared with Australia’s market. The size of some overseas companies can also dwarf those listed here. The largest company on the Australian market is BHP at AUD$219.7 billion (as of 18 Jan. 2021). In comparison, Apple—the largest company in the US—has a market cap of AUD$2.78 trillion (as of 15 Jan. 2021). So, there’s lots to choose from, depending on your investment strategy and risk appetite.

You can also dice the world’s sharemarkets in a number of ways. Typically, investors split them into Developed and Emerging Markets.

Developed Markets


These are well established sharemarkets, linked to the world’s leading rules-based economies with a large number of high quality blue-chip companies available to buy and sell. They experience a large daily trade volume, are highly regulated, sophisticated and transparent.

US markets are the most highly traded and their exchanges host some of the world’s most well-known companies, like Facebook, Ford Motor Company, or Boeing. The major exchanges include the New York Securities Exchange and the tech-focused NASDAQ. Japan’s Tokyo Stock Exchange also hosts some recognisable names, like Asahi Group, Bridgestone and the Honda Motor Co.


Emerging Markets


Unlike the developed world, these markets are less established, and typically don’t feature as many recognisable companies. Their trading systems are less sophisticated and their regulations may not be as refined as their developed peers. They are typically connected to countries with weaker, less developed economies, such as Indonesia, Thailand or Turkey.


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