Top countries and brokers Aussies use to invest in global markets
The 2021-2022 financial year has been a year of ups and downs for Australian investors, with the ASX 200 ending the financial year down over 10% – a stark contrast to the steady upward trajectory the index saw in FY20/21. While a combination of economic and geopolitical events have caused markets to experience volatility worldwide, savvy Australian investors have looked outside the box and diversified into global markets.
Based on data from Sharesight’s userbase, 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 FY21/22. We also examine the top brokers for international trades and some of the features these brokers have that make them so sought-after by Australian investors looking to diversify their portfolios.
As you might expect, the US was by far the most popular choice for Australian investors, with over 17,000 investors trading in US markets during FY21/22, compared to just 650 investors investing in the UK.
International markets most popular with Australian investors, based on Sharesight’s userbase
When the US is removed from the dataset and we zoom in to look at the remaining international markets, we can see that the UK, Canada and Hong Kong are also popular choices for Australian investors.
International markets most popular with Australian investors, excluding the US
With the value of the ASX dropping by around 10% in FY21/22, savvy investors have been seeking to diversify their portfolios by investing in overseas markets. For investors worldwide, US markets such as the New York Stock Exchange (NYSE), London Stock Exchange (LSE), Hong Kong Stock Exchange (HKEX) and Nasdaq are typically popular choices as they provide investors with access to some of the world’s highest-valued companies, along with a diverse range of industries and sectors.
Looking at the charts above, we can also observe a correlation between the most popular international markets and Australian expat numbers. For example, as of 2021, the US, Hong Kong, Germany and New Zealand are all part of the top 20 most common countries for expats to Australia. Other potential explaining factors for Australian investors’ preferred investment markets include similar currency conversion rates between the Australian and Canadian dollar, as well as the tendency for investors to invest in markets where they understand the language.
Diving deeper into the data, we see that Australian investors’ most popular trade of FY21/22 was Tesla (NASDAQ: TSLA). This corresponds to our Sharesight20 data from the same period, which shows that Tesla has consistently been one of investors’ most popular buy and sell trades. This is likely due to the strong performance of Tesla’s share price over the past few years, with opportunistic investors taking advantage of a few rare dips in the stock’s price during FY21/22.
Tesla and Apple topped the list of Australian investors’ most-traded international stocks in FY21/22
Similarly, Apple (NASDAQ: AAPL) has always been a popular investment for Sharesight users and this was no different in FY21/22. With the ongoing success of the iPhone and other Apple products, plus the company’s exponential share price growth over the past decade, it’s not hard to see why Apple was one of the top choices for Australian investors.
Alibaba (NYSE: BABA) was also a popular trade for Australian investors in FY21/22. The company’s share price has been on a downward trajectory throughout the financial year due to a combination of regulatory issues, recurrent Chinese lockdowns and falling consumer confidence, which is likely responsible for the high number of buy and sell trades made by Australian investors over the period.
Most popular Australian brokers for international trades
Once the data excludes brokers with the capacity for US trading, however, CMC Markets comes out ahead as the clear favourite for Australian investors, followed by Saxo Markets and Interactive Brokers.
Most popular Australian brokers international trades, excluding the US
It’s clear why CMC Markets was Australian investors’ favourite broker for international trades, with access to US, UK, Canadian and Japanese markets for $0 brokerage fees. As our data is based on the Sharesight userbase, it should also be noted that CMC’s connection to the Sharesight API allows investors to automatically sync their historical and ongoing trades to Sharesight, making it effortless for investors to track their international trades along with the rest of their investments.
Looking at the data inclusive of US trading, we can also see that Stake was a popular broker choice among Sharesight’s userbase. This is likely due to its support for US markets with $0 brokerage 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 is also likely that Selfwealth was a popular choice due to its support for the NYSE, NASDAQ, NYSE American, NYSE Arca and HKEX markets; plus Sharesight users’ ability to easily import their trades.
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