Think about your typical day.
☀️ You get up in the morning and turn on the light (electricity company).
📱 You grab your phone (tech company) and scroll social media (advertising company).
🍕 You wander into the kitchen and grab something to eat (food, beverage and logistics companies) while figuring out what to wear (clothes companies).
🚙 You drive to work (car company), get in the lift (elevator company) and stumble into the office with a coffee in your hand (maybe a small local business if you’re lucky).
💻 Then you work all day for your company, using software and tools from many companies.
In your typical workday alone, you interact with the products and services offered by hundreds of companies, many of whom you’d never be aware of because they’re involved in the background.
Given our global economy, many companies operate from and have their shares listed overseas.
To invest in the world around you, it’s a good idea to consider companies beyond our borders, which you can do most easily by buying individual stocks or through ETFs.
Looking overseas is even more meaningful when you consider that Australia only makes up 2% of the global stock market, which is a drop in the ocean next to the US, which accounts for over 60%.
Another point worth noting is that many of the biggest companies in Australia fall under financial (e.g. CBA, NAB & MQG) or resources (e.g. BHP, RIO & FMG) categories, which can lead to your portfolio not representing the global economy.
How do I invest outside Australia?
Thankfully, if you want to invest in companies outside Australia, it’s as easy as buying an Australian company. How great is that?!
If you want to buy individual shares (e.g. Apple or Google), you can check if your current broker offers any international markets (e.g. NYSE or LSE). It’s becoming increasingly common for brokers to provide access to US markets (NYSE & NASDAQ). You’ll have to hunt a little harder if you’re looking for access to other international markets.
👀 Some popular brokers in our community that offer US stocks include Stake, Pearler, Selfwealth, CommSec & CMC Markets.
Are you looking for an even simpler solution? You can invest in global companies using ETFs from your Australian brokerage account.
🌱 Are ETFs brand new to you? Tune into our 5-part ETF investing series on The Australian Finance Podcast, where we guide you through every step of the process. We used the IVV ETF – an ETF that invests in the top 500 US companies — as our case study.
Let’s look at a few examples of ETFs that give you access to international companies.
Using your regular ASX brokerage account, in just one trade, you could invest in the following:
🇺🇸 US Companies: iShares S&P 500 ETF (ASX: IVV)
Think Apple, Google, Amazon, Tesla, McDonald’s, Pfizer, Mastercard and Johnson & Johnson
🌏 Emerging Companies: Fidelity Global Emerging Markets Fund (ASX: FEMX)
Think Taiwan Semiconductor Manufacturing Company, AIA Group and HDFC Bank Ltd.
🥐 European Companies: Vanguard FTSE Europe Shares ETF (ASX: VEQ)
Think Nestle, Shell, AstraZeneca, LVMH Moet Hennessy Louis Vuitton and HSBC Bank.
Please note these ETFs were chosen for example purposes only.
And this is just a fraction of the international ETFs/funds available on the ASX.
We are fortunate to have many options, which can sometimes lead to analysis paralysis. That’s why we provide research on our favourite ETFs inside our Rask Core Community (for only $9.99 per month – that’s less than your Netflix subscription).
🌎 See? Investing internationally doesn’t have to be complicated, and it’s a fundamental building block in a diversified investment portfolio.
You got this!
And even if you don’t, we’ve got you covered with Rask Core, our ETF mini-series and our Beginner ETF Investing Course.
