Investors are increasingly looking abroad to overseas stock exchanges to broaden their investment portfolio, according to new data from CommSec.
CommSec, Australia’s largest online broker, has seen a sharp increase in demand for foreign owned shares.
The number of customers opening up international trading accounts has grown almost 50 per cent in the past six months, compared to the preceding half year.
Paul Rayson, Managing Director, CommSec said: “Australians are becoming more confident in investing in foreign based companies, many of which are known globally and deliver strong returns.”
This trend is backed up by a recent Investment Trends report stating that more than 20 per cent of Australian traders plan on increasing their exposure on international equities, a significant rise from less than 5 per cent in 2011.
“We’ve seen our clients increasingly looking at overseas markets to diversify their portfolio. The Australian market will continue to remain popular due to its familiarity and relatively strong returns; however it makes up only less than 3 per cent of global market capitalisation. Investors are becoming more sophisticated and are looking for broader opportunities,” Mr Rayson said.
“There’s also a lot of demand for investment in certain sectors, such as technology which doesn’t have as big a presence on the ASX. Investors are seeing quality companies like Apple and Google in growth sectors and want to get involved.”
CommSec data also shows that in the past 18 months, trading in international technology stocks has grown more than 67 per cent.
“We see a lot of customers dipping their feet into international trading around the time of high profile IPOs, such as the Alibaba listing last year,” Mr Rayson added.
CommSec has also seen growth in the number of individuals investing in internationally based Exchange Traded Funds, increasing fourfold since 2013. This shows investors are increasingly looking for a simple, low cost way to invest offshore and diversify their portfolio.
“Often people are apprehensive at first about looking outside the comfort of the ASX for share investing, however we’ve worked hard to simplify investing in overseas markets, so that it’s easy, intuitive and you have the support you require at all times,” Mr Rayson said.
CommSec has recently enhanced its international trading platform, which allows customers to trade in 25 different countries around the world and transfer foreign exchange online. This is supported by 24 hour help desk availability.