Top countries and brokers Aussies use to invest in global markets

Despite continued economic uncertainty, the ASX 200 performed well in FY24/25, ending the year up almost 10% (or more than 13% inclusive of dividends), and since then has continued to reach new highs. While many economies around the world were still grappling with inflation, tight monetary policy and geopolitical tensions, savvy Australian investors continued to hedge their bets and diversify into global markets, rather than relying solely on ASX investments to produce returns.

Based on data from Sharesight’s user base, this blog delves into the most popular global markets for Australian investors and some of the reasons why these markets were in such high demand during FY24/25. We also reveal the top brokers for international trades and some of the features that make these brokers so sought-after by Australian investors looking to diversify their portfolios.

Most popular countries for Australian investors

As expected, Australian investors strongly prefer investing in the local market, with the US being their second choice, followed by the UK, Canada, Hong Kong and Europe. This remains unchanged from last year.

Why Australians are investing in overseas markets

While the ASX delivered strong gains in FY24/25, it represents only 2% of global equity market capitalisation – leading discerning investors to look to overseas markets to diversify their portfolios. Looking at the chart above, it should also be noted that the S&P 500, Canada’s S&P/TSX Composite and Hong Kong’s Hang Seng all outpaced the ASX’s price performance over the same period.

We can also observe a correlation between the most popular international markets and Australian expat numbers. For example, as seen in the latest ABS data, the UK, US and Hong Kong are all part of the top 20 most common countries for expats to Australia. Investors also tend to favour markets where they understand the language, which may be another factor shaping these preferences.

Most popular stocks for international trades

Diving deeper into the data, we can see that Australian investors’ most popular overseas stock trade of FY24/25 was NVIDIA (NASDAQ: NVDA). This corresponds to our trading data from that period, which shows that while there were more Sharesight users trading in local stocks BHP (ASX: BHP) and Woodside Energy (ASX: WDS), NVIDIA was the third-most-popular trade overall, with the volume of NVIDIA trades actually being far higher than that of BHP or Woodside. This makes sense, considering the chipmaker’s record-breaking share price growth over the period, with an increase of more than 170%. Investors are likely confident there is further upside for NVIDIA, hence the high concentration of buy trades during FY24/25.

Morningstar’s equity analysts reinforce this view, awarding NVIDIA a wide economic moat, indicative of their belief that the company can maintain its competitive advantage for at least the next 20 years. According to Morningstar, NVIDIA’s market leadership in GPUs (graphics processing units), hardware, software and networking tools make it an important player in the growing AI market.

While tech titans may strive to find second sources or develop in-house solutions to diversify away from NVIDIA, analysts believe these efforts will only “chip away” at, not replace, NVIDIA’s AI dominance. Morningstar notes the company’s valuation depends on the pace of AI buildouts in the coming years. Over the last year, the market has generally traded in line with Morningstar’s Fair Value estimate for NVIDIA (as shown in the figure below).

Source: Morningstar

Compared to last year’s top international trades, the key difference we observed in FY24/25 is the emergence of NVIDIA as such a strong frontrunner. Once the number one stock, Tesla (NASDAQ: TSLA) has been downgraded to second place. This is unsurprising, considering Tesla’s volatility over the period.

It should be noted that the rankings are sorted by the number of users making trades in the asset (or making trades via a particular broker). Therefore, while there were more users trading in Tesla, the actual volume of trades in Amazon was higher.

Most popular Australian brokers for international trades

As shown in the chart below, Australian investors’ favourite broker for international trades was CMC Markets, followed by Stake, Interactive Brokers and moomoo.

Why these brokers are a popular choice for international trades

It’s easy to see why CMC Markets was Australian investors’ favourite broker for international trades, as it provides investors with access to US, UK, Canadian and Japanese markets for $0 brokerage fees.¹ CMC was also Australian Sharesight users’ overall broker of choice, as discussed in our article on the best brokers for stocks and ETFs.

Because our data is based on the Sharesight user base, it’s worth noting that CMC’s connection to the Sharesight API enables investors to automatically sync their trades to Sharesight, allowing them to seamlessly track their international trades along with the rest of their investments.

Looking at the data, we can see that Stake was another popular broker choice among Sharesight’s Australian user base. This is likely due to its access to US markets (including fractional shares) and low-cost trading fees. Investors using Sharesight can also import their historical and ongoing US trades from Stake via spreadsheet file or by automatically forwarding their trade confirmation emails – another convenient way for investors to keep track of their Stake trades.

It’s also clear that Interactive Brokers was a popular choice due to its expansive market coverage spanning 160 stock exchanges across 36 countries, including major markets in the US, UK, Japan and Canada. The broker is well-known for its low trading fees, especially for US and UK markets. In terms of Sharesight support, it’s easy for investors to get their IBKR trades into Sharesight by uploading their trading history via spreadsheet and connecting their IBKR account to Sharesight to capture any future trades automatically.

A new entrant to Sharesight’s top broker rankings, moomoo integrated with the Sharesight API in 2024, creating a seamless experience for investors looking to track their moomoo trades in Sharesight. The broker is likely a popular choice for Australian Sharesight users due to low-cost trading fees for US markets, as well as its access to the Hong Kong Exchanges (HKEX).

Track all your investments in one place with Sharesight

Thousands of global investors like you are already using Sharesight to manage their investment portfolios. What are you waiting for? Sign up and:

• Track all of your investments in one place, including stocks, ETFs, mutual/managed funds, property and even cryptocurrency
• Automatically track your dividend and distribution income from stocks, ETFs and mutual/managed funds
• Run powerful reports built for investors, including performance, portfolio diversity, contribution analysis, future income, exposure, multi-period and multi-currency valuation
• See the true picture of your investment performance, including the impact of brokerage fees, dividends, and capital gains with Sharesight’s annualised performance calculation methodology

Sign up for a FREE Sharesight account and get started tracking your investment performance (and tax) today.

FURTHER READING

• Track stocks on over 60 global exchanges with Sharesight
• Automatically track trades from over 200 global brokers
• Track investments in over 100 currencies

¹ FX spreads apply.