Today we have uploaded a great chart looking at the market capitalisations of major world markets in terms of US dollars as at the end of December 2010.
The chart shows that Australia was only 3% of the entire world market. Some might ask why then do we suggest that Australian shares make up 50% or more of recommended growth asset allocations? Our investment philosophy takes into account research suggesting that the franking credit benefits offered by Australian shares are not fully reflected into the value of Australian shares as they are not available to non-residents. This suggests that over the long term there is an extra benefit from holding Australia shares for residents of Australia. However we also acknowledge that including international shares provides diversification benefits for a portfolio.
Please click on the chart to view a full page printable pdf copy of the chart.
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