Many retail investors are still focused almost entirely on the ASX. But the reality is our market only represents about 2% of global equity.
That focus often leads to a concentration in bank shares and resources, resulting in portfolios with limited sector exposure that don’t reflect the broader brands and industries driving the next wave of global growth.
We consume globally, but invest locally
Think about it. Millions of Australians are paying for Netflix every month, streaming music on Spotify, upgrading to the latest iPhone, ordering meals on Uber, or driving an EV. These brands are shaping our lives, but they’re not listed here. They’re headquartered in the U.S., Europe, or China – and their growth is happening offshore.
When you look at the ASX, there’s almost no exposure to these global consumption trends. The local market remains concentrated in financials and resources, sectors that don’t necessarily mirror the way we spend or live.
Chasing growth is important, but it’s also about alignment. More and more young investors want their portfolios to reflect the way they live and consume, but it doesn’t mean abandoning the ASX altogether.
Consuming the world, owning almost none
Resources and banks are still strengths. But if you only trade locally, you’re shutting yourself out of nearly half the world’s market and sectors like tech and luxury brands that exist on a very small scale here.
Your portfolio is ignoring the global megatrends driving wealth creation and doesn’t match our consumption patterns.
The numbers don’t lie
The ASX makes up about 2% of global equity markets, the US sits at around 45%, China at 10% and Japan at 6%, so the bigger risk is missing out on the scale and growth of global companies.
Another way to look at it is through sector composition. On the ASX, more than half the market capitalisation is tied up in banks and resources. Compare that to the U.S., where over a quarter of the S&P 500 is technology, or to Europe and Asia, where luxury brands, manufacturing, and advanced healthcare play much larger roles.
Investors are catching on
ASX data shows 16% of Australians hold international shares. Now 16% might look small, but that number is growing as younger investors want their portfolios to reflect their lives and look less like their parents’ dividend-heavy bank shares.
And growth isn’t just about bigger returns; it’s about broader horizons. Investors are realising that staying local means settling for a slice of 2% while ignoring the other 98%. Young investors in particular are trading home bias for global opportunity.
The real risk is staying home
Whenever global diversification comes up, people trot out the same line: “International shares are too risky.” Currency swings, political instability, and regulatory hurdles are the usual suspects.
Sure, these risks are real, but the bigger risk is staying local. By keeping portfolios locked into the ASX, investors are underweight in entire sectors that are shaping the next wave of growth – tech, luxury brands, global healthcare and renewable energy.
Yes, currency volatility adds complexity. But it also creates opportunity. A falling Australian dollar can turbocharge offshore returns while hedging tools give investors more ways to manage exposure. For many, the issue isn’t that global markets are riskier; it’s that concentration at home brings its own set of risks.
Staying local might feel safe, but it may also mean missing out on the liquidity, scale, and innovation that global markets deliver.
Risk isn’t what you think it is
Most investors think ‘risk’ is about stepping into something unknown – buying international shares, dealing with foreign markets, or juggling currencies. But that’s the easy definition. The harder truth is that risk isn’t just about what you buy, it’s about what you leave out.
If your portfolio is built entirely on the ASX, you’re taking a very concentrated bet. Banks and resources might feel safe because they’ve been around forever – and older investors felt secure with them, but history tells us industries rise and fall. Just ask anyone who thought newspapers, department stores, or telcos were permanent pillars of wealth.
Concentration risk is the quiet killer in Australian portfolios, and it hides under the illusion of safety.
The risk has shifted
Currency swings and foreign regulations are challenges, but they’re increasingly manageable with today’s tools. The bigger risk for retail investors isn’t losing money offshore – it’s missing the growth opportunities that are happening offshore.
The definition of risk has changed. Once, it was about volatility and uncertainty in foreign markets; today, it’s about the cost of omission.
Global markets include sectors such as technology, healthcare, and consumer brands that aren’t as prominent on the ASX and don’t always move in step with local banks and miners. It helps explain why international equities continue to attract attention from investors looking beyond the domestic cycle.
Complexity isn’t a dealbreaker
Global investing looks effortless, but it isn’t always straightforward.
Take the EV market as an example. Tesla is trading at around US$1.3 trillion, while fast-rising competitor BYD sits closer to US$133 billion. On paper, BYD looks like an attractive way to capture the growth story. The catch? Access. Buying those shares directly in China isn’t simple for Australian retail investors.
There are ways in. Australians can buy in through its U.S. ADRs or Hong Kong listing, but access still depends on having a stockbroker with genuine global reach and that can manage the complexities of the overseas markets.
That gap between opportunity and execution is exactly why access and guidance in navigating global markets is important. The message is clear. Offshore growth isn’t out of reach, but it does require the right tools.
Yes, global investing is more complex. ADRs, dual listings, and tax implications all can be daunting. But the landscape has shifted: Stockbrokers with global reach, smarter platforms, and better investor education have made execution achievable.
Key forces driving the shift offshore
- Technology access – online platforms have levelled the field.
- Currency dynamics – volatility is now seen as manageable, even useful.
- Market depth – global markets offer scale and structural growth the ASX lacks.
- Portfolio resilience – diversification across regions and sectors lowers risk and builds strength.
The takeaways
- The ASX is just 2% of global equity markets.
- By staying local, investors miss entire sectors shaping the next decade.
- Currency volatility isn’t just risk – it’s opportunity.
- Technology and platforms have stripped away access barriers.
- Younger investors are leading the charge, aligning portfolios with their lifestyles.
- The ASX has strengths, but it’s not the whole story.
The choice ahead
Do you stick with what you’re comfortable with domestically or embrace the reality of a global lifestyle? If you’re paying subscriptions to global platforms, upgrading to offshore tech, and travelling the world, ask yourself: Why wouldn’t you want to own the very companies reflecting your lifestyle?
Join the discussion. See what’s trending right now on Australia’s largest stock forum and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.